Ambuja Cements, the Adani Group’s building materials arm, has posted a 94.24% fall in consolidated net profit at `51.30 crore for the quarter ended September, impacted by rising energy and raw material costs. In comparison, the company had posted a net profit of Rs 890.67 crore for the same quarter of last financial year.
During the quarter under review, the company’s net sales on a consolidated basis rose 8% to Rs 7,051 crore, from `6,529 crore recorded during the same three-month period last fiscal.
A consensus estimate of Bloomberg analysts was expecting the firm to post a consolidated net profit of Rs 346 crore (3 brokerages) for the reporting quarter.
“The cement industry has been facing significant margin pressure resulting from steep rise in global energy prices. However, recent cooling off in energy prices and post-monsoon demand pick-up appears like a silver lining for coming quarters,” Ambuja Cements CEO Ajay Kapur said.
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Ambuja has embarked upon a journey to gain both scale and market leadership, with focused efforts on ramping up capacity and margin expansion, he said, adding that while cost pressures have not gone away, the company’s growth plans “remain strong”.
During the quarter under review, the company’s raw material costs rose to Rs 433 per tonne, impacted mainly due to higher fly ash and gypsum prices, from Rs 406 per tonne posted during the year-ago quarter. Its power and fuel costs rose to `2,006 per tonne (from Rs 1,245 per tonne), led by a steep rise in global energy prices.
Freight and forwarding costs fell to Rs 1,190 per tonne (from Rs 1,284 per tonne), even as other expenses rose to `940 per tonne, from Rs 853 per tonne.
The firm, which was acquired by the Adani Group, also terminated its agreement with Holcim Technology for payment of technology fees at 1% of eligible net sales, effective September 16.
In October, the company’s shareholders approved changing its financial year-end from December 31 to March 31. Accordingly, the current financial year has been extended by three months till March 31, 2023.
In September, the Adani Group completed the earlier announced acquisition of Ambuja Cements and ACC through a special purpose vehicle, Endeavour Trade and Investment. The deal, announced on May 15 this year, comprises Holcim’s entire 63.11% stake in Ambuja Cements, which owns a 50.05% interest in ACC, and its 4.48% direct stake in ACC.
