Financial Daily from THE HINDU group of publications
Saturday, Feb 09, 2002
Financial Daily from THE HINDU group of publications Saturday, Feb 09, 2002 |
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Corporate
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Performance Pay hike puts paid to DSP's net profit hopes Our Bureau
KOLKATA, Feb. 8 DURGAPUR Steel Plant's (DSP) hopes of making a net profit this fiscal have been dashed, thanks to the impact of the pay revision. Sources told Business Line that in a full year, the impact of the pay revision was around Rs 70 crore. The pay packet of SAIL employees was revised from January 2001. However, even apart from the pay hike, the fact was that this year, DSP would not have the `comfort' of its bottomline bolstered by the Rs 143 crore that it had earned by selling its power plant. This is also worrying the DSP management. ``We, thus, have to make up for nearly Rs 200 crore this fiscal'', the sources said, adding that after this it would not be possible to make a net profit this year as was earlier planned. DSP made a cash profit of Rs 58 crore last fiscal and is now struggling to cover its interest of around Rs 180 crore. DSP's depreciation is around Rs 210 crore. In a market faced with dipping prices, DSP is trying to maintain its turnover at about Rs 2,000 crore. ``Even though we are not able to achieve high value, we are trying to enhance volume since it helps us meet our fixed cost'', the sources said. DSP now has a labour force of 20,000. During the first three rounds of VRS, it pruned its workforce by 5,090 with a large chunk — 3,500 — going in the 1999 VRS. Referring to the physical performance, sources said that DSP produced 1.37 lakh tonne of saleable steel in January with production touching 1.25 million tonne in the first 10 months of the current fiscal. DSP, which was set up with an initial capacity of one million tonnes of ingot steel, produced 1.63 lakh tonne of hot metal, 1.48 lakh tonne of crude and 1.37 lakh tonne of saleable steel in January. The plant has been operating at 96 per cent of its rated capacity for some time now, according to the sources. DSP, which is a major producer of railway products, is now engaged in the development of metre gauge locomotive wheels, which is an import substitute item.
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