Despite a sharp dip in price realisations, Gujarat Ambuja Cements managed to hold its own and post a net profit of Rs 131.66 crore in 1997-98 against Rs 132.38 crore last year. Net sales has jumped 23 per cent to Rs 1,145.53 crore and dividend has been upped to Rs six per share from Rs 5 per share.
Ambuja, one of India's most successful cement companies, sold 5.06 million tonnes of cement last year against 4.04 million tonne.
In a statement, the company claimed that its performance has improved in all markets. "Ambuja Cements performance in Gujarat is notable. In a market with large surpluses, the company has increased its market share from 21 per cent to 26 per cent. Similarly, in Mumbai its sales jumped by a hefty 50 per cent," the release added.
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Operating margins, a key indicator of operational efficiency, improved to 36.3 per cent to 35.8 per cent. "We have managed to do that by cutting expenditure," the statement said. In comparison, other cement companies lag behind with ACC at 10.7 per cent, India Cements at 21.3 per cent and Madras Cement at 33.1 per cent.
Profits fell marginally despite a sharp rise in other income of 64 per cent to Rs 20.49 crore. Expenditure stood at Rs 813.23 crore, up by 23.73 crore compared to Rs 657.25 crore. Net interest has also risen 56 per cent at Rs 107.76 crore during the year.
Ambuja Cement has provided 4.87 crore towards tax and Rs 108.50 crore for depreciation.
Ambuja's exports touched 5.4 lakh tonnes of cement valued at Rs 83.95 crore compared to Rs 83.83 crore of cement exported in year ended June 1997.
Ambuja Cements expects to increase productivity and improve margins by lowering costs. The company expects to get a fillip to the cement demand following the government's announcement of housing policy and the proposed investments lined up in the infrastructure sector.
During the first four months of the fiscal 1999 (April-July 1998), the cement demand has grown at 6.5 per cent against 4.2 per cent in the previous year.