Ambuja Cements reports 4.4% profit fall

India’s Ambuja Cements has reported a 4.4 per cent fall in net profit, which reached INR3.038bn (US$45.6m) in 1Q16. In the first quarter of 2015, net profit reached INR3.177bn.

The company’s income has decreased by 0.89 per cent at INR25.809bn for quarter under review as compared to INR25.581bn for the quarter ended 31 March 2015. Net sales declined slipped by 0.3 per cent to INR24.18bn in 4QFY16 as against INR24.25bn in the corresponding quarter last year, according to a company statement. Sales volumes were reported to have increased by 9.5 per cent to 5.86Mt YoY.

In terms of operating costs, energy cost was lower by 19 per cent due to fuel prices and increased usage of petcoke and alternative fuel. Petcoke consumption increased from 40 to 60 per cent YoY.

Cost optimisation initiatives undertaken by the company as well as low packing costs, despite increased railway freight, helped to lower distribution costs slightly.

However, in spite of lower production and distribution cost, operating EBITDA was down by 11.8 per cent, mainly due to lower prices, additional provision towards contribution to District Mineral Foundation and increased promotion expenses.

Ambuja Cement is part of LafargeHolcim and has five integrated cement plants and eight grinding centres in the country.