Guj Ambuja First Half Net Up 14% To Rs 59.2cr

Gujarat Ambuja Cements has reported a 14% rise in net profit to Rs 59.2 crore in the first half of 1997-98. Earning per share stood at Rs 8.05 against Rs 7.19 in the corresponding period of 1996-97. Sales rose by 35 per cent to Rs 456.3 crore. The company paid a dividend of Rs 2.5 per share.

Gujarat Ambuja, which has a June year-ending, said the good performance was despite a sluggish market and poor prices. Sales have risen 38.78 per cent to 2.29 million tonnes, but poor prices have knocked down operating margin to 34.78 per cent, from 36.49 per cent. Operating profit rose to Rs 159.1 crore from Rs 122.8 crore, while interest climbed substantially to Rs 49.5 crore. Cash profit rose to Rs 109.6 crore from Rs 88.64 crore.

Depreciation touched Rs 50.3 crore from Rs 35.6 crore due to the commissioning of new plants. Cement prices have been under severe pressure due to the large build-up of capacities. On the other hand, major input costs like power, coal and freight continue to rise, squeezing the cement industrys operating margins further. However, better productivity and lowering of costs even further have enabled Ambuja Cement to show a fine performance during the first half, said the company.

Ambuja said all its four plants were operating at full capacity and the commissioning of captive power plants now meant that the entire requirement of three million tonnes had been met.

Contrary to the general perception, growth in cement demand is very good at 9% in the first 10 months of 1997-98 even though the economy is not doing very well, said Anil Singhvi, the companys treasurer.