The Hindu Business Line : CEAT posts four-fold rise in net

Mumbai April 23 CEAT Ltd has reported a fourth quarter net profit of Rs 23.41 crore, nearly four-fold higher than the net profit of Rs 4.93 crore registered in the corresponding period last year.

The company's gross turnover was Rs 631 crore (Rs 540 crore), which was 16.9 per cent higher year-on-year.

The EBITDA (earnings before interest, taxes, depreciation and amortisation) margin improved to 9.8 per cent from 6.4 per cent.

According to Mr K.J. Rao, Chief Financial Officer, CEAT, the rise in profit is attributable to the increase in sale of high value products, cost optimisation and restructuring of debt portfolio.

Although consumption of raw materials increased during the quarter, better sales offset this increase, he added.

For the financial year ended March 31, 2007, the net profit stood at Rs 39.25 crore, compared with Rs 0.52 crore in the previous year. The gross turnover for the year stood at Rs 2,391 crore against Rs 1,952 crore last year, higher by 22 per cent. Net sales improved from Rs 1,747 crore to Rs 2,134 crore. The company's board has recommended a dividend of Rs 1.80 to its shareholders as compared to no dividend offered in the previous year.

DEMERGER

The board also approved hiving off the investments business of CEAT into a separate company. Mr Rao said this decision is in keeping with the company's objective of focussing on its core tyre business alone. For every 100 shares of CEAT, existing shareholders will get 75 equity shares of CEAT and 25 equity shares of the new investment company both of face value Rs 10 each.

The new demerged company, whose name has not been disclosed yet, will be listed on the BSE and the NSE.

According to a press release, there will not be any change in the shareholding pattern of the company, and the promoter's stake remains unaltered.

The company's shares closed on Monday at Rs 137.35 on the BSE, dropping 2.86 per cent from the previous close.