Mumbai, Feb 19: Defying sluggish demand, Gujarat Ambuja Cements has achieved the highest sales growth in the industry with a 35 per cent increase during the first six months ended December 1997.Despite high interest costs, the company's net profit grew by 14 per cent during the period. This is in sharp contrast to the declining profits of most cement manufacturers, including the industry leader ACC which posted a 61 per cent drop in profits in the first half of the current fiscal. Sales have risen sharply to Rs 524.28 crore, up from Rs 389.03 crore in the corresponding period last year. The company's operating profits during the first half increased from Rs 122.83 crore to Rs 159.16 crore during the period. Cash profits at Rs 109.59 crore rose considerably from Rs 88.64 crore during the first half of last year.
The company posted a net profit of Rs 55.98 crore, an increase of 14 per cent over the first-half profits of 1996 which stood at Rs 48.98 crore. According to Gujarat Ambuja treasurer Anil Singhvi,although the industry continues to be plagued with the twin challenges of excess supply and rising costs, the company has successfully faced the challenges through continuous innovations and improvements.The company's sales volume at 22.94 lakh tonnes increased 39 per cent over the corresponding period last year when the company had sold 16.46 lakh tonnes.
The Gujarat Ambuja board has declared an interim dividend of 25 per cent.
The company's interest outgo jumped 45 per cent from Rs 34.2 crore last year to Rs 49.6 crore in the first six months.
Depreciation also increased from Rs 35.6 crore to Rs 50.3 crore, a rise of 41 per cent.
Cash profits went up from Rs 88.6 crore to Rs 109.5 crore, thus registering a 25 per cent increase.
However, the tax liability at Rs 32 crore was 20 per cent lower than the last year's figure of Rs 40 crore. The company has commissioned its captive power unit in Gujarat, which will meet the entire requirements of its 3 million tonne facility in the state. "This willsubstantially reduce the cost of power for the company as the power cost will be much cheaper than the state grid supplies," the company said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
