The Hindu Business Line : Mangalam Timber hopes to wipe out accumulated losses by next year

MANGALAM Timber Products Ltd, a B.K. Birla group company, hopes to wipe out its accumulated losses either by the end of the current financial year, 2005-06, or latest by the middle of next year.

In the last few years, the company has succeeded in reducing its accumulated losses to around Rs 5.5 crore from a level of Rs 32 crore. According to Mr G.S. Gupta, Managing Director, Mangalam Timber, this is not a worrisome figure.

"Barring unforeseen circumstances we hope to wipe out the accumulated losses soon. For doing so we are not taking any other initiative. The existing sales trend of the company is pretty good and we feel that it would take care of the losses," Mr Gupta told Business Line.

He also confirmed that the formal letter from the Board for Industrial & Financial Reconstruction (BIFR) has reached their office on Monday stating that Mangalam Timber has de-registered from it.

The company, which from its commissioning in 1987 was in the red, was referred to the BIFR in 1998. Talking on the BIFR de-registration, Mr Gupta, the development will help the company in negotiating more aggressively with the banks and financial institutions.

Regarding sales, he said, the company would succeed in maintaining the levels it attained last year. In 2004-05, Mangalam Timber recorded its highest-ever turnover of Rs 62 crore and net profit of Rs 2.88 crore.

In the first half of the current year, 2005-06, Mangalam Timber's turnover was around Rs 30 crore. Cash profit was Rs 2.10 crore and net profit was Rs 1 crore.

Mr Gupta further added that Mangalam Timber was free of debt except for the one from the promoting company, Kesoram Industries, to the tune of Rs 9 crore. He said the amount would be paid back in due course of time.

He ruled out any possibility of transforming the debt into equity.

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