India: Ambuja Cement Q4 net down by 30%

Ambuja Cement, India's fourth-largest cement maker, slipped considerably in its latest quarterly performance. The Holcim-owned cement major's profitability for the December quarter declined far below the estimates, making it one of the cement industry's worst performances in recent quarters.

At a time when its sister concern ACC managed a better-than-expected quarterly show, Ambuja's net profits plunged 30 per cent to INR2120m (US$39.2m) compared with INR3020m (US$55.9m) in the previous corresponding quarter. Not only the profits were affected as the company could not even keep its top line intact. Net sales too declined though marginally to INR23,130m against INR23,290m in the same quarter last year.

Industry experts had estimated Ambuja to post around INR3000m of profits which was a modest decline of around one per cent. However, it seems poor demand, declining prices and higher input costs during the quarter delivered a major hit on Ambuja's balance sheet. Meanwhile, the cement major declared a final dividend of INR2.2/share.

In its outlook the company said that after low cement demand as seen in the quarter ended December consumption is expected to improve. The rising cost of energy, logistics and raw materials would impact the margins.