Mumbai, May 26: Hit by a steep drop in global petrochemical prices, Indian Petrochemical Corporation (IPCL) has reported a whopping 88 per cent drop in net profit to Rs 29.36 crore for the year ended March 31, 1999 against Rs 243.69 crore in the last fiscal. The company, however, has maintained the dividend at Re 1 per share.The sharp decline in profit comes at a time when the Government had set the ball rolling for the divestment of its 25 per cent stake in IPCL to a strategic partner.
Net sales have gone upto Rs 3,114.81 crore against Rs 2,982.90 crore in the previous year. Operating profit was at Rs 565.13 crore compared with Rs 769.30 crore. Gross profit stood at Rs 303.26 crore against Rs 509.73 crore, according to an IPCL release.
While total expenditure moved up to Rs 262.91 crore for the year ended March 31, 1999 from Rs 232.56 crore, interest declined to Rs 261.87 crore from Rs 259.57 crore. Depreciation was higher at Rs 270.38 crore as compared with Rs 237.35 crore.
IPCL's production hasincreased to 10.71 lakh mt for the year ended March 31, 1999 from 9.65 lakh mt, up 11 per cent. The capacity utilisation at the company's plants was 91 per cent despite a 45-day shutdown at the Nagothane complex.
During the year, the company expanded its polyethylene capacity and commissioned a new HDPE plant at Dahej to emerge as the largest polyethylene producer in the country, the release said.
The sales volume kept pace with the production volumes with the company selling a record 11.60 lakh mt of merchant products during the year 1998-99.
The company has privately-placed debentures and bonds worth Rs 195 crore and issued commercial papers worth Rs 1,275 crore on replenishment basis as an alternative source of working capital. It has taken steps to ensure Y2K compliancy by July 1999, said the release.
Insight
Divestment price may be hit
IPCL's sharp dip in net profits for the second consecutive year is because of depressing petrochemical market. Unlike Reliance, the company didnot have the option of recording volume growth, which has resulted in almost stagnant turnover and lower profits.
In spite of its poor performance, the stock has been trading near Rs 100 higher than its all time low of Rs 40.20 in September 1998. The reason that is keeping stock up is the divestment of 25 per cent of Government's stake and handing over of control. Shishir Asthana
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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