Ambuja Cements Limited, a member of Holcim group recorded a year-on-year surge of 23 percent in net sales in 2021, said a company press release. The growth was driven by volume growth and product mix. The earnings before interest and taxes (EBIT) grew by 25% during the period.
However, the consolidated net profit of the company during the quarter 4, 2021 declined by 55. 48 percent to Rs. 430.97 crore. The net sales were higher by 6%. The earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter was impacted by unprecedented increases of fuel prices, explained the company press release.
Net Sales for the year stood at ₹ 13,794 Crore compared to ₹ 11,175 Crore in the previous year. “Efficiencies delivered under our flagship ICAN program partly mitigated the impact of cost headwinds, ” said the release. However, total operating cost per ton increased by 3% during the year.
The company’s operating EBIT stood at ₹ 2,656 Crore compared to ₹ 2,125 Crore, recording a strong growth of 25% year on year. The net sales during the quarter stood at ₹ 3,679 crore compared to ₹ 3,468 crore in the corresponding quarter of the previous year, registering a growth of 6 % year on year. Operating EBIT stood at ₹ 398 crore.
“We are continuously working towards the development of our communities based on their needs in the areas of water resource management, skill as well as agri- livelihood development, women empowerment, community health and education for all,” said the company.
Commenting on the performance Neeraj Akhoury, CEO, Holcim India and managing director & chief executive officer, Ambuja Cements Limited said, Ambuja delivered a strong full year performance backed by strong performance in volume, product mix and operational efficiencies combined with significant acceleration in volumes under the Master Supply Agreement with ACC. During the year we delivered our highest ever sales volume supported by stabilization of operations at our new plant in Rajasthan However, the December 2021 quarter was unfavorably impacted by very steep escalation in fuel prices coupled with subdued demand in multiple regions.
Expansion plans
On the expansion plans Mr. Akhoury said, the board has approved in principle an investment of ₹ 3,500 Crore for a cement grinding expansion plan of potential 7.0 million tons across our existing grinding units at Sankrail and Farakka, and at a greenfield location at Barh, in Bihar. This is supported by a 3.2 million tons brownfield clinker expansion at our existing integrated plant in Bhatapara, Chhattisgarh, he added.
Performance of ACC limited, a material subsidiary
Meanwhile, the net sales of ACC Limited, another subsidiary of the Holcim group for the year 2021 increased to ₹ 15,814 Crore compared to ₹ 13,487 crore the previous year, registering a growth of 17%. EBIT for the year 2021 improved by 40% to ₹ 2,397 Crore. Free Cash Flow improved by 14% during the year, supported by strong working capital management, with year-end cash balance in excess of ₹ 7,000 Cr.
Net Sales of the the company during the quarter increased to ₹ 4,137 Crore compared to ₹ 4,066 Crore last year. EBIT during the quarter stood at ₹ 396 Crore.
Outlook
Economic activity continues to see improvement due to upbeat business confidence. The recently announced Union Budget focuses on growth led by substantial increase in the capex 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.