Ambuja Cements (500425) Q4 99/00 earnings summary

Executive summary

• FY ended June 30, 2000 delivered record normal-business profit of Rs174.56cr despite drought, price pressure and rising input costs.

• Total post-tax profit reached Rs428.16cr, including Rs253.60cr after-tax extraordinary income from subsidiary share sales.

• Management pursued geographic expansion and scale through the DLF Cement takeover, an ACC strategic alliance and new capacity projects.

Financial highlights

• Sales were Rs1,302.50cr vs Rs1,249.73cr; operating profit before interest and depreciation was Rs397.41cr vs Rs382.03cr.

• Normal-business profit after tax was Rs174.56cr vs Rs150.47cr; total profit after tax, including extraordinary income, was Rs428.16cr vs Rs150.47cr.

• Sale of subsidiary shares generated Rs281.60cr profit before tax; the after-tax extraordinary gain was Rs253.60cr.

• Interest expense declined to Rs98.71cr from Rs108.48cr, while depreciation was Rs123.89cr vs Rs122.96cr.

Outlook and guidance

• Cement demand was expected to grow 8–10% in coming years, supported by housing and infrastructure; stronger economic growth could lift demand further.

• The current year began positively, with prices improving in most regions and management expecting further post-monsoon price gains.

• A 2mt Andhra Pradesh greenfield plant was planned under ACIL, with estimated project cost of Rs620cr and production expected in about two years.

• A 1mt Sankrail grinding unit and Bhatapara clinker upgrade were scheduled for completion by December 2000; a 10MW captive power unit was expected by September 2000.