The Hindu Business Line : Ambuja Cements reports 12% growth in quarterly net at Rs 292 cr

Mumbai, Oct 19 Ambuja Cements has posted a 12 per cent rise in net profit for the quarter ended September 30 to Rs 292 crore, against Rs 262 crore logged in the same quarter last year.

Total income increased to Rs 1,318 crore in the quarter, (Rs 1,160 crore).

Net sales rose 15 per cent to Rs 1,300 crore (Rs 1,131 crore). Profit before tax increased 14 per cent to Rs 409 crore.

EBITDA (earning before interest, tax, depreciation, amortization) rose 6 per cent to Rs 452 crore for the September quarter. “Operating costs in the period were impacted by higher raw material consumption for blending, higher energy and transportation costs, and an increase in employee compensation,” said Mr A.L. Kapur, Managing Director, Ambuja Cements.

In addition, operations at the Ambujanagar plant in Gujarat were disrupted during August and September as a result of severe flooding, he added. The plant contributes about one-third of the company’s annual production of 18 million tonnes.

Freight and forwarding cost in the quarter jumped 24 per cent to Rs 267 crore (Rs 216 crore). Power and fuel costs were up 12 per cent to Rs 240 crore, the company said.

“The company has incurred a one-time non-recurring expense of Rs 313 crore. If not for this, the company would have done much better this quarter. It may perform better in the coming days as cement prices are expected to rule firm,” said Mr Novonil Guha, research analyst, Prabhudas Lilladher Ltd.

Open offer postponed

Global cement major Holcim Ltd has put off the open offer to acquire a further 20 per cent in Ambuja Cements Ltd. The Swiss-based Holcim already owns 36 per cent in the company.

In an announcement on BSE, DSP Merrill Lynch, the open offer manager said “the proposed date of opening of the open offer stated in the PA (public announcement) i.e. October 18, 2007 is postponed till further notice in this regard is published by the Manager to the Offer”.

Holcim in August had said it planned to buy 20 per cent or 306.6 million shares, from public shareholders at Rs 154 each, beginning October 18. DSP Merrill did not give a reason for the postponement.

“Due to adverse market conditions in Sri Lanka and depreciation in local currency, the company’s subsidiary Ceylon Ambuja Cements has incurred continuing operating losses and net worth of the said subsidiary company has been eroded substantially. Accordingly, during the quarter, the company has recognised a provision for diminution in value of investments of Rs. 27 crore,” the company said.

The company added a cement grinding plant at Roorkee in Uttaranchal. It plans to build another cement grinding factory of 1.5 million tonne in Gujarat.

During the quarter, Ambuja boosted clinker capacity at Rabriyawas in Rajasthan to 2 million tonnes from 1.6 million tonnes a year.

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