The Hindu Business Line : Indo Gulf net falls to Rs 14.91 crore

INDO Gulf Fertilisers Ltd (IGFL) today reported a net profit of Rs 14.91 crore for the quarter ended March 31, 2005, as against the previous corresponding Rs 27.27 crore.

Net sales/income from operations was static at Rs 171.59 crore (Rs 171.59 crore for the year ago period).

For the whole of 2004-2005, the company's net profit was Rs 56.93 crore (Rs 90.27 crore) on net sales of Rs 678.35 crore (Rs 578.52 crore).

According to an official statement the financial performance of the two years are not comparable as in FY04 the company had received arrears of Rs 47.02 crore as retention price support from the Government.

The board of directors has recommended a dividend of Rs 2.80 per share.

"The increased focus of the Government on farm sector growth and predictions of normal monsoon augur well for the fertiliser sector. The acreage and yield under cultivation in kharif and rabi crops is expected to increase further. This will spur higher consumption of urea and lead to a growth of about 4 per cent," the statement said.

The company produced 9.85 lakh tonnes of urea, reflecting a capacity utilisation of 113 per cent and higher on-stream operations. Sales of urea at 9.75 lakh tonnes grew by 11 per cent fuelled by a favourable monsoon in both kharif and rabi seasons.

With the availability of natural gas poor last year, IGFL had to take naphtha as an alternate fuel at higher cost.

Higher production, increased sales, operational efficiencies and better realisation helped the company stave off the adverse impact of the Group Concession Scheme and increase in input costs.

"Indo Gulf has been able to offset the significant negative impact of the Group Concession rate of Rs 425 / tonne due to the heterogeneity in group formation in Stage I and then by further reduction in CRC by Rs 120 per tonne for Stage II of Urea Pricing Policy.

"Also the inflationary rise in packing and manufacturing costs was also offset, by overall efficiencies and aggressive marketing," the statement said.

The company has sought Government approval for capacity additions through debottlenecking and brownfield expansions.

The brownfield expansion of one million tonnes is at a cost of Rs 1,700 crore while the debottlenecking plan takes the capacity from 8.65 lakh tonnes to 11.1 lakh tonnes at a cost of Rs 157 crore.

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