The Hindu Business Line : Madras Cements' net up 67% despite rise in fuel cost

DESPITE a 20 per cent increase in power and fuel cost and only a marginal increase in realisation per tonne of cement, Madras Cements Ltd has posted a 67 per cent increase in net profit and a 6.5 per cent increase in sales for the year ended March 31, 2005.

It reported a net profit of Rs 55.92 crore on sales of Rs 739.97 crore in 2004-05 against a net profit of Rs 33.40 crore on sales of Rs 694.60 crore in the previous year. The board of directors has recommended a final dividend of Rs 4 a share (40 per cent), taking the total dividend for the year to Rs 10 a share (100 per cent).

The company has attributed its performance to tight fiscal management, which resulted in interest cost for the year coming down by 27.6 per cent to Rs 35.89 crore from Rs 49.60 crore in the previous year. This was in spite of a Rs 42-crore increase in its debts during the year (from Rs 427 crore in 2003-04 to Rs 469 crore in 2004-05).In the fourth quarter of the year, the company reported a net profit of Rs 22.92 crore on sales of Rs 208.13 crore against a net profit of Rs 10.38 crore on sales of Rs 191.52 crore in the corresponding quarter in the previous year.

However, the Q4 net profit includes a deferred tax credit of Rs 6.99 crore. Otherwise, the profit before tax for the quarter under review was Rs 15.61 crore against Rs 13.48 crore in the year-ago period.Power and fuel cost during the year under review was Rs 213.10 crore against Rs 177.24 crore in the previous year. During the year, Madras Cements commissioned a 36-MW coal-based captive power plant at its plant in Alathiyur in Tamil Nadu. This and a 20-MW diesel generator together will meet the plant's power requirement fully, according to Mr A. V. Dharmakrishnan, Senior Vice-President — Finance, Madras Cements.

The company, he said, continues to take steps to reduce its power and fuel cost, especially in view of the rising oil prices.

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Madras Cements' net up 67% despite rise in fuel cost