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Tuesday, Oct 29, 2002

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Low sugar prices take toll on Balrampur Chini

Our Bureau

KOLKATA, Oct. 28

SUGAR major Balrampur Chini Mills Ltd recorded a mixed result in the second quarter of 2002-03. While its turnover increased by 65 per cent, net profit suffered a setback and fell by 35 per cent compared to the corresponding quarter of 2001-02.

Net sales jumped up to Rs 198.54 crore for the quarter ended September 30, 2002, from Rs 120.11 during the corresponding quarter of the previous financial year but net profit dropped to Rs 3.98 crore from Rs 6.08 crore in the same period.

Throwing some light on the performance, the company spokesman said it was greatly affected by poor sugar prices. Balrampur Chini was successful in selling its products, but poor profit margins affected the bottom line. While the average sugar production cost in India was Rs 1,400 per quintal, the average selling price is around Rs 1,200 per quintal.

Another reason for the depressed profitability was the high excise duty paid by the company. In the last quarter, Balrampur Chini paid an excise duty of Rs 10.95 crore against Rs 4.95 crore in the previous year marking a growth of 121 per cent. On a half-yearly basis, it increased by 570 per cent to Rs 43.78 crore from Rs 6.53 crore.

``The increase in excise duty is on account of duty on potable alcohol and also on increased production of sugar in the half year compared to the corresponding half year in the previous year,'' the company stated. It may be noted that excise duty on potable alcohol is the range of 65-70 per cent.

Earnings per share dropped by 35 per cent to Rs 2.10 from Rs 3.21. Interest payout in the quarter under review was Rs 3.58 crore against Rs 3.30 crore in the previous year. Total expenditure increased by 75 per cent to Rs 185.15 crore against Rs 106.99 crore.

Along with the results, the company stated that it was currently implementing a 19.55 MW cogeneration power plant at Balrampur in Uttar Pradesh. The plant is expected to be commissioned by the end of 2002.

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