Mr. Neeraj Akhoury, Managing Director & CEO stated: "The foundations of our business remain strong to drive growth, expand operating margins and enhance cash conversion.”
“Robust improvements in operational efficiencies, cost reduction programmes coupled with volume growth, have led to Operating EBITDA increase by 55% for the quarter and a margin expansion of 710 bps. Our focus on working capital management has resulted in a strong positive cash conversion. We are executing our growth strategy, through a new plant at Marwar Mundwa in Rajasthan, which is scheduled to be commissioned in Quarter 2 2021. We are pleased to announce an interim dividend of ~ 17 per share based on our strong performance and continuous healthy cash generation. We would like to thank our shareholders for their continued support."
Financial Performance for the quarter ended 30 September 2020 The company registered a strong volume growth of +8%, which supported by positive price, has resulted in 10% growth in net sales during this quarter as compared to the same period of previous year.
Net Sales during the quarter stood at ~ 2802 Crore compared to ~ 2556 Crore in the corresponding quarter of the previous year. Total operating cost per ton has declined by 8% on a year on year basis, on account of lower input costs and efficiency programmes. In addition, network optimisation has gained momentum due to acceleration of Master Supply Agreement (MSA) with ACC. Outbound logistics cost is lower due to favourable market mix and efficiencies.
As a result, Operating EBITDA recorded a strong growth of 55% to ~ 681 Crore with a margin expansion of 710 bps in Quarter 3 2020 quarter as compared to the corresponding quarter of the previous year.
Profit after tax is up by 88% for the quarter from ~ 235 Crore in 2019 to ~ 441 Crore in 2020. Greenfield project at Marwar Mundwa, Rajasthan is expected to commission in Quarter 2 2021. This will further improve the company’s market position in North and West regions.
On a sustainability front, Ambuja Cement is focusing on alternative fuels through utilising waste resources from other industries in its manufacturing process in an environmentally friendly way. During the year the company has processed around 6 million t of waste. In addition, Ambuja Cement has been declared as 8 times Water Positive and 2.7 times Plastic Negative.
Ambuja Cement Foundation (ACF) has so far reached out to 26 lakh people from across the country during this pandemic period. In continuation of its efforts in mitigating Covid impact in rural India, ACF provided 14 oxygen concentrators to isolation centres in six locations. ACF also explored livelihood opportunities through the Skill and Entrepreneurial Development Institute (SEDI).
At its meeting recently, the Board of Directors approved an interim dividend of ~ 17 per equity share of ~ 2 each.
Consolidated Financial Results for the quarter ended 30th September 2020
• Operating EBITDA up by 35% with margin expansion by 540 basis points to 22.2%.
• 48% growth in EBIT for the quarter vs previous year
Performance of Material Subsidiary - ACC Limited
Net Sales during the quarter remained flat at ~ 3468 Crore compared to ~ 3464 Crore last year. Operating EBITDA & EBIT for the quarter registered a significant improvement up by 21 % & 26% to~ 671 Crore & ~ 511 Crore respectively. Operating cost per ton of cement continues to reduce attributable to efficiency improvements and cost reduction programmes. Share of blended cement has gone up to 91 % during the quarter vs 88% in the same quarter previous year, reiterating a focus on sustainability.
With the Government of India as well as the Reserve Bank of India assigning highest priority to acceleration of economic growth, the company is confident of resurgence in demand across sectors. Rural and agriculture sectors are expected to lead the revival in economic activities. This, along with continued focus on infrastructure development in terms of roads, highways, ports, railways and affordable housing will support cement demand in the mid-term.
Read the article online at: https://www.worldcement.com/indian-subcontinent/23102020/ambuja-cement-shares-q3-financial-results/