• PAGE ONE
• INDEX
• HOME

MRF's Q3 net down 32 pc; seeks Government support

M. Ramesh

CHENNAI, July 31

MRF Ltd has reported a net profit of Rs 8.19 crore for the quarter ended June 30, 2001, 31.6 per cent lower than the Rs 11.98-crore recorded in the corresponding quarter of last year.

The quarter under review is the third quarter of MRF's accounting year.

Net sales were down 27.62 per cent at Rs 439.31 crore (Rs 606.98 crore).

Total expenditure was Rs 388.66 crore, which works out to 88.47 per cent of net sales. In the third quarter of 2000, total expenditure had amounted to Rs 545.23 crore (89.82 per cent of sales).

Interest charges were lower at Rs 13.90 crore (Rs 16.59 crore). Depreciation was Rs 24.11 crore (Rs 27.36 crore). Provision for taxation amounted to Rs 4.83 crore (Rs 6.45 crore).

Mr Philip Eapen, Executive Director (Marketing), spoke to Business Line today about the company's performance, problems and prospects. Excerpts from the interview:

How would you comment on your company's performance last quarter?

I think under the current circumstances, we have done quite well. We have been able to hold the bottomline up. Really, you should compare the quarter's results with that of the immediate quarter, when the economic slowdown was more severe than in the cor responding quarter of the previous year. Our net profit last quarter (ended June 30, 2001) was double that of the preceding quarter (when it was Rs 4.28 crore).

One should also note that we have achieved this in the face of distress selling discounts of the competition. They (the competition) are selling (tyres at prices that are) about Rs 1,000 lower than ours. Still we are the most profitable company in the in dustry.

How is the outlook for the current quarter?

In a year, the best quarter is April-July, because in the summer months truckers change tyres. They can't go on with wornout tyres. But the current quarter is our financial year's closing quarter and we are expecting the usual support from the trading co mmunity.

Also, you seem to have no control over the prices of your main raw material, rubber?

Yes. Rubber prices have gone up to around Rs 34 a kg as compared to Rs 26 a kg, this time last year. The Government's refusal to allow import of rubber against exports will affect the whole industry. When there is a recession, the Government must at leas t help us export.

In everything else, the Government says that the demand-supply dynamics of the market must take its course, then why not in rubber? After all, rubber is not a food item!

How are your exports doing? (The company opened an office in Dubai last year to step-up exports in West Asia.)

They are so far okay, but I'm worried about the coming months. We are looking at close to Rs 200 crore of exports this year versus around Rs 175 crore last year.

You have plants in six different locations (Goa, Chennai, Arakkonam, Pondicherry, Medak and Kottayam). Don't you find it difficult to manage such a multi-locational structure?

Well, there are both pluses and minuses, but the pluses are more than minuses. We don't intend to change this structure.

Pic.: Mr Philip Eapen, Executive Director (Marketing), MRF.