The Hindu Business Line : Asset sale helps Dunlop post Q1 net of Rs 23 cr

THE board of Dunlop India Ltd, which met on Wednesday, approved the unaudited financial results of the company for the April-June quarter of the current fiscal, which showed a net profit of about Rs 23 crore on a total income of about Rs 35 crore.

The entire income was generated from the sale of the company's idle property located in different parts of the country. The company has also paid about Rs 12 crore to the debenture holders.

A board-level source told Business Line that the resumption of production from the company's two factories - at Ambattur in Tamil Nadu and at Sahagunj in West Bengal - might be delayed.

This was because a few reputed tyre makers who showed interest in utilising the two factories' installed capacity are now reluctant to do so in view of the higher rubber prices.

Notwithstanding outsourcing of tyres on a conversion basis, these tyre makers were even planning to cut down on production from their own manufacturing facilities because of adverse market conditions, the source indicated.

"Dunlop had to wait for a conducive market situation to resume production from its two factories where production had remained under suspension due to working capital shortage."

However, the source said, the management is keen on reviving the ailing tyre company, subject to the approval of a rehabilitation scheme by the Board for Industrial and Financial Reconstruction (BIFR).

He added that the financial results of the company for the full year ended March 2004 were under scrutiny of the auditor.

The results would be placed before the next board meeting, to be held soon.

He also said that the money earned from selling assets had been kept in safe custody, and not a single rupee had been spent without prior approval of the BIFR.