Ambuja Cements Q4 profit slumps 55% as higher costs weigh; revenue inches up

Holcim Group-controlled cement maker Ambuja Cements Ltd reported a 55.5% decline in its consolidated net profit for the quarter ended December 2021, weighed down by higher costs and tepid demand.

Profit for the fiscal fourth quarter fell to Rs 430.97 crore from Rs 968.24 crore a year earlier, said Ambuja, which follows the January-December financial year.

Revenue from operations for the fourth quarter rose 2.32% to Rs 7,625.28 crore from Rs 7,452.87 crore in the same period of 2020. Expenses for the December quarter increased 6.7% to Rs 6,865.61 crore from Rs 6,434.43 crore.

Ambuja’s consolidated numbers include the results of ACC Ltd. It also said its board recommended a final dividend of Rs 6.30 per share, subject to the approval of the shareholders.

Other key highlights

1) Standalone net profit for Q4 down 49.4% to Rs 251.66 crore from Rs 497.1 crore in the year-ago period.

2) Standalone revenue from operations stood at Rs 3,735.12 crore, a rise of 6.25% from Rs 3,515.11 crore a year ago.

3) For the full year 2021, consolidated net profit rose 19.44% to Rs 3,711 crore from Rs 3,106.84 crore during 2020. 

4) Consolidated revenue from operations for 2021 rose 18% to Rs 28,965.46 crore from Rs 24,516.17 crore.

5) Sales volume for the December quarter remained flat at 7 million tonnes.

Management commentary

Neeraj Akhoury, CEO of Holcim India and MD and CEO of Ambuja Cements, said the company delivered a strong full-year performance with earnings before interest and tax growth of 25%. This was backed by strong performance in volume, product mix and operational efficiencies combined with significant acceleration in volumes under the master supply agreement with ACC, he said.

He said that during the year, the company delivered its highest-ever sales volume supported by stabilisation of operations at its new plant in Rajasthan.

“However, the December 2021 quarter was unfavourably impacted by steep escalation in fuel prices coupled with subdued demand in multiple regions,” he said.

On the outlook, the company said economic activity continues to see improvement due to upbeat business confidence. It said the recently announced Union Budget focuses on growth led by substantial increase in capital expenditure for the infrastructure sector.

“Cement demand growth is expected to remain positive backed by increased demand for housing combined with the government’s thrust on infrastructure development,” the company said.