Ambuja delivers robust performance in a challenging quarter
EBITDA growth of 61% for the quarter
78% rise in Operating EBIT with EBIT margin expansion of 310 basis points backed by strong growth in volumes and efficiency gains
The greenfield integrated plant at Marwar Mundwa to commence operations in the third quarter of 2021
Embarking on the next step of our growth journey with cement capacity expansion of 1.5 million tonne at Ropar (Punjab)
Health and Safety remains key priority; focus on vaccination drives
Neeraj Akhoury, CEO India, Holcim and Managing Director and CEO Ambuja Cements Limited said:
“Ambuja registered a strong performance in the second Quarter of 2021 with 78% growth in operating EBIT and 310 basis points expansion in the EBIT margin. This performance resulted from strong growth in sales of premium products and successful execution of efficiency improvement programs which has partly been impacted by rising energy and raw material costs. Synergies under the master supply agreement have significantly benefited both Ambuja and ACC as we leverage our national footprint.
Along with delivering robust financial performance, we remain committed to be best in class in sustainability goals. Our waste heat recovery systems projects are progressing as per plan and along with reduction in emissions will also reduce our dependence on thermal energy. With support of our parent, Holcim, we are focused on conserving natural resources by utilising alternative fuels and raw materials. We have used about 46 lakh tonnes of waste-derived resources in the first six months of 2021. Our increased focus on sustainability, digitisation and innovation is enabling us to reach closer to our global goal of net zero emissions.”
The second wave of Covid-19 in the country was managed proactively by the company. We continue to ensure strict adherence to government guidelines across all our plants and offices. Our 24x7 Covid-19 crisis control room support is enhanced with a third party medical services provider for close end to end support to our people across the country. We have also facilitated vaccination drives wherein more than 97% of our employees, dependents and third party workers have been covered. Our plants are operating under strict Covid-19 protocols in line with the current risk which is being dynamically assessed on a daily basis.
Financial performance for the quarter ended 30 June 2021
Net Sales during the quarter stood at Rs 3,342 cr compared to Rs 2,145 cr in the corresponding quarter of the previous year, resulting in a growth of 56%. Premium products volume grew at 69% compared to the same period last year.
Total operating cost per ton sees a marginal decline, despite continuous headwinds faced on account of rising input costs. The operational efficiency programs in the plants along with logistics efficiencies partly mitigated the impact. EBITDA during the quarter at Rs 960 cr showed a growth of 61% and Operating EBIT at Rs 829 cr showed a robust growth of 78%.
Ambuja helped 8,347 customers to save about 260 lakh litres of water at construction sites by providing value added services such as modular curing, concrete mix proportions, and rain water harvesting systems.
New Expansion Project
In line with our expansion plans, the board has approved 1.5 million tonne cement capacity expansion at the existing grinding unit at Ropar in Punjab.
Consolidated unaudited financial results for the quarter and half year ended 30 June 2021
EBITDA higher by 63%
Margin expansion for the quarter by 180 basis points
Growth in Operating EBIT is 87%
Performance of ACC Limited, a Material Subsidiary
Net Sales during the quarter increased to Rs 3,810 cr and recorded a growth of 51% vs previous year. EBITDA during the quarter up by 65% vs previous year at Rs 869 cr, with an EBITDA margin expansion of 200 basis points. The company also witnessed strong delivery on cost efficiency actions under project ‘Parvat’ across cost levers combined with healthy working capital despite volatility due to the second wave of COVID 19.
GDP for fiscal 2021-2022 is projected to grow at the rate of 9.5% and is expected to remain strong going forward. The measures announced by the government including higher spending for infrastructure development will support revival of economic activity in general and lead to higher cement demand. With the operational efficiency programs and expansion projects, the company feels confident to capture the future growth.