Ambuja Cements (500425) Q4 02/03 earnings summary

Executive summary

• FY ended 30 Jun 2003: net sales Rs 1,735 crore, operating profit Rs 512.78 crore and PAT Rs 221.73 crore; PAT rose 19% YoY.

• Consolidated net profit was Rs 292.83 crore versus Rs 179.71 crore YoY; cement production and sales reached 12.77 million tonnes, up 29%.

• Standalone cement production rose 37% to 9.84 million tonnes and sales rose 37% to 9.817 million tonnes, despite depressed prices and a weak economy.

Financial highlights

• Sales were Rs 2,025.30 crore before excise duty, versus Rs 1,583.01 crore; net sales were Rs 1,734.72 crore versus Rs 1,384.17 crore.

• Profit before tax increased to Rs 253.20 crore from Rs 231.34 crore; PAT rose to Rs 221.73 crore from Rs 186.52 crore.

• Interest expense declined to Rs 87.94 crore from Rs 96.64 crore; depreciation increased to Rs 171.64 crore from Rs 137.82 crore.

• Proposed final dividend Rs 4/share plus Rs 3 interim, taking FY dividend to Rs 7/share versus Rs 6; payout ratio was 55%.

Outlook and guidance

• Cement demand was expected to grow ~10% p.a. over the next 2–3 years, supported by housing finance, infrastructure projects and a favorable monsoon.

• Chandrapur expansion work was progressing: planned spending of ~Rs 78 crore to lift cement capacity from 2.0m to 2.4m tonnes and captive power capacity from 40 MW to 50 MW.

• Energy-saving projects under implementation were estimated at Rs 4 crore investment, with expected annual savings of Rs 3 crore; completed measures were expected to save Rs 4.50 crore annually.