Ambuja Cements (500425) Q4 2006 earnings summary

Executive summary

• Calendar 2006 cement sales rose 11.6% to 16.3Mt; sales value increased 47% to Rs4,847.86cr and PAT reached Rs1,340.07cr.

• The 18-month reporting period reflects the shift to a December year-end and ACEL’s amalgamation; its results are not directly comparable with the prior 12-month period.

• Holcim obtained management control; its shareholding reached 26.44% at 31 Dec 2006.

Financial highlights

• Calendar 2006 PBT was Rs1,616.02cr vs Rs643.96cr; PBIDT was Rs1,880.68cr vs Rs951.63cr.

• Calendar 2006 PAT was Rs1,340.07cr vs Rs511.65cr; cement production and sales were each 16.3Mt vs 14.6Mt.

• Reported 18M net sales were Rs6,268.29cr and PAT Rs1,503.25cr; these figures include ACEL and cover a longer period than the prior year.

• Domestic cement prices rose 28% and export prices 14% YoY; total sales rose to Rs4,847.86cr from Rs3,296.42cr.

Outlook and guidance

• Cement capacity is targeted to rise from 16Mt to 22Mt by 2009 through planned investment of Rs3,350cr.

• Cement demand growth of 11.5% CAGR is projected for the XI Plan; price outlook was positive for 2007 and the following year.

• Industry capacity additions of up to 80Mt were announced, with implementation expected to begin in phases from 2009.