Ambuja Cement increases volumes by 7% in 4Q20
LafargeHolcim's Indian subsidiaries, Ambuja Cement and ACC Ltd, reported high sales volumes in the 4Q20. Ambuja Cement's financial performance for the 4Q20 saw volumes grow by seven per cent, while ACC Ltd's net sales during the quarter increased to INR40,660m (US$560.1m) compared to INR39,700m last year.
Ambuja Cement 4Q20
Ambuja Cement's sales were supported by strong prices and a 14 per cent YoY growth in net sales. Net sales during the quarter stood at INR34,680m compared to INR30,380m in the corresponding quarter of the previous year. Total operating cost per tonne declined by two per cent, supported by operational efficiency programmes in the plants as well as logistics efficiencies. These have been partly compensated due to impact of rising fuel costs.
EBITDA during the quarter reached INR7680m, a YoY growth of 40 per cent and operating EBIT totalled INR6420m, up 61 per cent. Ambuja generated INR26,060m from operations led by improved performance and efficient working capital management.
Mr Neeraj Akhoury, managing director and CEO, said: "Ambuja continues its journey of delivering strong performance with EBITDA growth of 40 per cent in the quarter and 23 per cent for the full year 2020. Margin expanded by 410bps during the quarter and 480bps for the full year backed by strong performance in price, volume and costs."
The greenfield project at Marwar Mundwa, Rajasthan, will commission this year. This will further improve the company’s market position in the northern and western regions.
Ambuja Cement's environmental social governance programme touched lives of 2.6m beneficiaries through its CSR and community programmes in water resource management, livelihood promotion skill based training, human development including community health, women empowerment programme and education. Ambuja Cement used 8.2Mt of waste-derived resources as alternative raw materials and fuels in its production process, thus conserving considerable amounts of depleting natural resources.
Performance of ACC Ltd subsidiary
EBITDA during the quarter at INR7010m showed a growth of 30 per cent versus the previous year with a margin expansion of 360bps. Generated additional cash and cash equivalents of INRI3,570m in 2020, driven mainly by strong working capital actions.
Outlook
The Union Budget 2021 will give an impetus to India's economic growth with its strong focus on domestic manufacturing, infrastructure development, public sector undertaking privatisation, and continued focus on healthcare, rural and social development. Ambuja Cement expects these overall economic measures along with continued focus on rural economy and affordable housing segment to positively impact cement demand.
