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Our Bureau

Registers Rs 2.78-cr net profit, first time in over 15 years

Thiruvananthapuram , April 19

The public sector Kerala State Textile Corporation has effected a turnaround of sorts by registering a net profit of Rs 2.78 crore during 2005-06, the first time in more than 15 years.

This is an all-time record for the company languishing in the red for quite sometime now, said Mr Jacob Joseph, Chairman and Managing Director.

The company had posted a net loss of Rs 2.31 crore the previous year.

The operating profit of Rs 6.1 crore and a cash profit of Rs 4.62 crore for 2005-06 also happen to be its all-time best figures. Total revenues have looked up seven per cent from Rs 35.74 crore of the previous year to Rs 38.01 crore. This was achieved after providing for Rs 1.84 crore in depreciation and Rs.1.48 crore in interest payments.

According to Mr Joseph, the most redeeming feature about the performance is that raw material costs as a component of production overheads has been brought down from 51.11 per cent 40.06 per cent. Similarly, the company managed to peg back labour expenditure from 18.36 per cent to 17.81 per cent and electricity overheads from 18.03 per cent to 16.62 per cent.

Mr Joseph attributed the improved performance to the renewed thrust on professional management practices as well as bringing transparency and accountability into raw material and spare part purchases. All this while, the single-minded focus on ensuring quality of yarn produced was never lost sight of. The company has targeted to achieve a net profit of Rs 5 crore during the current financial year.

Back in 2000-01, the Kerala State Textile Corporation had to be referred to the Board for Industrial and Financial Reconstruction after its networth had turned negative from successive losses suffered. State Bank of Travancore,the operating agency, has since submitted a revival proposal after writing off accumulated losses.

More Stories on : Textiles | PSU | Kerala

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