Low demand due to decline in construction activities, high freight charges and rising input costs caused Ambuja Cement to post decline of 25 per cent in the net profit for the financial year ended December 31, 2008.

The company's net profit declined to Rs 1,390 crore in the reporting period as compared to Rs 1,846 crore in the financial year 2007. The company posted 9.5% increase in net sales during the period which stood at Rs 6,261 crore as compared to Rs 5,718 crore in the same period last year.

The Chairman and Managing Director of Ambuja Cement, AL Kapur said, "Spiraling input costs were a cause of concern. The rising fuel costs pushed inflation into double digits, which muted the industry growth."

Mr. Kapur said that the company would go for further expansion of business after analyzing recovery of real estate segment, the worst hit sector under the impact of global slowdown due to decline in construction activities and falling prices of property.

As per official estimates, cement demand growth is likely to be in the range of 6-8% in 2009.

Meanwhile, the firm also announced dividend of Re 1 per share with immediate effect. The shares of company declined 2 per cent and closed at Rs 71 in the Bombay Stock Exchange on Friday.