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L&T Q1 net falls 76 pc

Our Bureau

MUMBAI, July 21

LARSEN & Toubro Ltd has reported a decline of 76.18 per cent in its net profit at Rs. 18.88 crores for the first quarter ended June 30, 2000 as against Rs. 79.25 crores in the year-ago period.

According to the company, lower sales realisation and increased production costs due to higher fuel prices affected the margins. The impact of the shut-down at the Nashik Glass Works also contributed to the decline in profits.

Besides, many of the jobs in the Engineering and Construction (E&C) segment were in their early stages of completion. The company said it recognises profits on contracts only when a major portion of the job is complete. ``Profits are expected to improve in the second half of the year as the jobs reach an advanced stage of completion,'' the company said.

Net sales during the quarter were Rs. 1,663.36 crores as against Rs. 1,591.85 crores. Other income rose to Rs. 32.61 crores from Rs. 15.74 crores. Sales of cement and clinker were 3.12 million tonnes, an increase of 18 per cent.

Total expenditure was Rs. 1,516.54 crores (Rs. 1,369.14 crores) and interest accounted for Rs. 83.76 crores (Rs. 83.71 crores). Depreciation was Rs. 75.09 crores (Rs. 65.89 crores) and provision for taxation was Rs. 1.70 crores (Rs. 9.60 crores).

The order booking for the first quarter was Rs. 2,084 crores. The order backlog at Rs. 7,652 crores was up by 17 per cent over the year-ago period.

Advisors for cement business demerger

L&T has appointed J.P. Morgan and DSP Merrill Lynch as its financial advisors to `assist and advise' the management on the issue of demerger of its cement business.

L&T had announced earlier of its board's approval for the demerger of its cement business into a separate company as part of its restructuring exercise. The investment bankers will advise the management on matters pertaining to the financial structure o f the demerged company and issues relating to strategic and financial partner or capital market-related transaction and help in negotiations with such investors.

``With the appointment of the advisors, L&T has formally set in motion the process for carrying out the restructuring of its cement business,'' the release said.

Related links:
L&T net dips 27.4 per cent
L&T board clears cement demerger

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