20th October 2004, 04:10 PM
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Gujarat Ambuja July-Sept net profit jumps
Gujarat Ambuja July-Sept net profit jumps
Quote:
Gujarat Ambuja Cements Ltd., India's third-biggest cement maker by capacity, said on Wednesday a boom in export prices had driven a more than six-fold increase in quarterly profit, powering a rally in its shares.
Gujarat Ambuja, the nation's top cement exporter, said standalone net profit in the first fiscal quarter ended September rose to 904.6 million rupees, lower than a Reuters poll estimate of 955 million rupees.
Net sales climbed 58 percent to 5.99 billion rupees.
Gujarat Ambuja shares rose as much as 2.8 percent after the results to 364.20 rupees in a weak market. The shares are up nearly 17 percent in 2004, compared with a 1.7 percent drop in the key Bombay share index.
The stock struck a nearly four-year intra-peak last week.
A recent drop in cement prices in the western Indian state of Gujarat -- a key market -- was temporary, said Jayesh Doshi, assistant vice-president of Gujarat Ambuja.
Operating margin has risen to 30 percent in the past quarter, from 20 percent in the year-ago period, despite steep increases in power and fuel cost due to higher oil and coal prices, the company said in a statement.
It said higher exports, better sales realisation in export and domestic markets led to a strong performance. Realisation is the amount a company receives from the sale of products after taxes and dealer commissions.
EXPORTS RISE
Gujarat Ambuja, which exports about 15 percent of its output, benefitted from higher cement prices in the Middle East, as rising crude prices fuelled a construction boom in that region.
Ambuja, whose plant is close to the coast, exported about 33 percent more cement in the past quarter from a year ago. On average, global cement prices in the past quarter were $40 per tonne, up nearly 50 percent from a year ago period.
"The export prices are expected to remain firm," Doshi said.
Huge demand from the Gulf helped to ease local oversupply and local prices remained firm, despite monsoon rains that interrupt Indian construction activity.
Cement prices in India, the world's biggest cement consumer after China, were about 15 percent higher on average, at 145 rupees per 50-kg bag from year-ago levels.
The group's shipments in the past quarter totalled 3.3 million tonnes, up 16.3 percent on the year. That compares with a 7 percent rise in the industry's shipments in the same period to 28.9 million tonnes.
Some 54 companies together produced 117 million tonnes of cement in the fiscal year ended in March, while consumption was 113.8 million tonnes, up 5.8 percent from a year ago.
Gujarat Ambuja trades at 14.2 times 2005 earnings, and is slightly expensive compared with industry leader Grasim Industries Ltd., which is available at 11.4 times.
Thailand's Siam Cement, the most valuable sector stock in the Asia Pacific region, quotes at 10.9 times predicted profits for next year, according to Reuters data.
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