India: Ambuja Cements reports flat growth in full-year volumes

Ambuja Cements, part of the LafargeHolcim group, reported flat sales growth for the 12 months ending 31 December 2015.

The company underlined that during the year the Indian cement market largely remained subdued although there was a 5.2 per cent rise in volumes during the final quarter. However, lower cement price realisation led to overall net sales being down by 5.5 per cent in 2015 to INR9368 crore, compared to INR9911 crore a year earlier.

Lower operating costs with improved operational efficiencies partly mitigate the impact of reduced sales. In addition, a provision of INR 52 crore has been recognised towards contribution to the District Mineral Foundation and National Mineral Exploration Trus, as per the Mines and Mineral (Development and Regulation) Amendment Act, 2015.

Profit before tax for the year was down by 34 per cent due to lower EBITDA and an additional depreciation charge of INR108 crore due to the implementation of Schedule II of the Companies Act, 2013, effective 1 January 2015.

Profit after tax declined by 46 per cent at INR808 crore during the year versus INR1496 crores in 2014. This was due to lower profit before tax during the current year, and also because of a write-back of tax provisions in the previous year.

In 2015, the company installed a 0.8Mt roller press at its Sankrail grinding unit in West Bengal and commissioned a 6.5MW waste heat recovery system at its Rabriyawas unit in Rajasthan. It also successfully secured a coal block at Gare-Palma in Chhattisgarh. Capex for the development of this coal block is expected to be approximately INR370 crore. Mining operations are expected to commence in 2018.

Going forward, Abuja Cement anticipates the long term outlook for Indian cement demand to remain positive given the government’s “focus on housing, concrete roads, smart cities and infrastructure development.” Meanwhile, the company will continue to focus on operational efficiencies, it added.