In fact, significant savings in cost seems to have enabled the company post an improved performance for the third quarter December 31, 1999. The company has posted a net profit of Rs 4.95 crore as against Rs 3.06 crore in the corresponding period of the previous year, an increase of 62 per cent. The quarter-to-quarter figures, however, are not strictly comparable on account of shipping division demerger and vesting of Raasi Cements with ICL.

Speaking to the media, ICL vice-chairman and managing director N Srinivasan said that the company had reduced cost through freight rationalisation, lower power and fuel consumption and by efficiently utilising its existing resources. He said that the per tonne power cost at Sankar Nagar plant had been reduced from 114 units to 97 units.

He also said that the company was contemplating yet another VRS to further reduce workforce in older plants. A continuous exercise is on to upgrade all the plants at a cost of Rs 800 per annual tonne to improve throughput, Srinivasan said.

The operating profit was Rs 71.36 crore (Rs 59.83 crore). The interest cost was substantially higher at Rs 49.10 crore (Rs 40.42 crore) basically on account of the Raasi acquisition. ICL, he said, was in the process of restructuring its debt so as to bring down the cost of funds by at least 150 basis points entailing an annual savings of Rs 21 crore.

The company has already negotiated interest rate reduction with ICICI and has recently raised debentures at 13 per cent to swap high cost debts. Srinivasan said that the company would be retaining the entire debenture issue proceeds which would be used to pre-pay IDBI loan to the tune of Rs 125 crore. The debenture issue raised Rs 366 crore against the Rs 200-crore issued including greenshoe option of Rs 50 crore. For the balance, talks are on with IDBI to reduce the interest rate. Depreciation was Rs 17.31 crore (Rs 16.35 crore).

For the nine-month period April-December 1999, ICL has posted a turnover of Rs 1,041.33 crore (Rs 732.77 crore) and net profit of Rs 39.57 crore (Rs 28.73 crore). During this period, the company produced 42.14 lakh tonnes (38.45 lakh tonnes including Raasi) and sold 41.49 lakh tonnes (38.54 lakh tonnes).