Ambuja Cements Profit Slumps 36 Per Cent In Sept Quarter

Ambuja Cements on Wednesday reported a 36 per cent decline in standalone net profit at Rs 153.57 crore for the third quarter that ended on September 30, 2015, missing street estimates, due to lower price realizations, additional depreciation charge, among other factors. Net profit of the cement maker stood at Rs 154 crore compared with Rs 239 crore a year ago. Net sales fell 4.3 per cent Y-o-Y to Rs 2,095 crore.

The company’s sales volume at 4.82 million tonnes grew 3.2 per cent over the year ago quarter, but with realisation, declining 6.9 per cent net sales at Rs 2,095 crore, dipped 4.3 per cent Y-o-Y.

“The cement market was subdued during the quarter. Although sales volumes increased by 3.2 per cent, lower realizations by 6.9 per cent led to overall net sales being less by 4.3 per cent. Lower operating costs with operational efficiencies have partly mitigated the impact of reduced sales realization,” the company said in its statement to BSE.

The EBITDA reported at Rs 310 crore, a fall of 21.1 per cent Y-o-Y and margins at 14.8 per cent, consequently, which were much lower than 17.96 per cent seen in the year-ago quarter. While operating performance suffered, additional depreciation charge of Rs 28 crore on implementation of Schedule II of the Companies Act, 2013, further impacted the bottom-line.

The company said a provision of Rs 40 crore set aside for the District Minerals Foundation and the National Mineral Exploration Trust impacted EBITDA margins by 130 basis points (bps).

Being a northern regional player, the company’s EBITDA per tonne at Rs 643 was better than Rs 448 for ACC, which is a pan-India player.

Moving forward, the company remains optimistic on construction activities picking up post monsoon. The company remains positive considering government’s focus on housing, concrete roads, smart cities and infrastructure development. Ambuja would also continue to focus on improving operating efficiencies.

Yesterday, shares of Ambuja Cements rose 1.56 per cent to close at Rs 208.75 per share on the BSE, while the benchmark Sensex closed at 27,039 points, down 0.78 per cent. Earnings were released after the markets closed for trading.

Currently, the stock was marginally down 1.77 per cent to Rs 205 on the BSE.