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- 07 Feb 2023
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FINANCIAL PERFORMANCE FOR Q4CY22 IMPROVES SHARPLY - AMBUJA CEMENTS LATEST QUARTERLY RESULT
AMBUJACEM - 595 Change: 0.40 (0.07 %)Ambuja Cement – Q4CY22 First Cut
(CMP: Rs 384; MCap: Rs76,190 crore)
Q4CY22 Earnings Summary (Standalone)
Net revenues were up 10.4% YoY, 12.5% QoQ to Rs4128.5 crore (vs I-direct estimate. Rs4055.7 crore), that was led by better sales volume
Sales volumes increased 7.5% YoY to 7.7MT (vs est. of 7.3MT) backed by an increase in blended cement (clinker factor reduced from 60.1% to 59.5%). Sales realizations were also up 2.6% YoY, 3.7% QoQ to Rs5362/tonne
On the cost side, power & fuel cost declined by 21% QoQ to Rs1573/tonne that was led by 14% reduction in Kiln fuel cost (ie. from Rs2.84/‘000 Kcal to Rs2.45/’000 Kcal) as change in coal basket and group synergies on coal procurement helped to contain the cost
Freight cost were also lower by 7.9% YoY, 8.2% QoQ on account of optimization of warehouse infrastructure through multi model logistics. Direct sales also improved from 44% to 50%. These measures along with higher dispatches through rail helped to reduce lead distance from 263 kms to 248 km
With these measures, EBITDA margin improved 687bps QoQ to 15.2% (vs I-direct estimate: 12.2%). On per tonne basis, company reported EBITDA/t Rs813/t (up 2.1% YoY, 89.7% QoQ) that was higher than I-direct estimate of Rs678/t
While company incurred exceptional expenditure of Rs56 crore towards IT transition costs, better margins and higher other income led to net profit growth of 46% YoY, 167% QoQ to Rs369 crore
View: The synergies with the Adani group have started showing the results with the current quarter reflecting the sustainable reduction in power & fuel and freight costs. Further, the new management has reiterated that they remain committed to achieving significant size, scale and market leadership with strong emphasis on margin expansion and world-class ESG standards going forward.
Impact: Positive