The Hindu Business Line : ITC net up 4%; new FMCG biz drives turnover

Kolkata, Oct. 24 ITC Ltd registered a marginal increase of 4.13 per cent in its net profit at Rs 803 crore for the quarter ended September 30, 2008, up from Rs 771 crore during the corresponding quarter last year, according to a press statement issued by the company.

“The unprecedented increase in excise duties on non-filter cigarettes, steep increase in commodity prices and store rentals, the brand building costs of the new personal care portfolio and the significant investments in enhancing distribution capability combined to exert pressure on profitability during the quarter,” the release said.

During the quarter under consideration, the company registered 15 per cent growth in net turnover at Rs 3,763 crore (Rs 3,270 crore) driven by the continued scale up of new FMCG businesses, which grew by 30 per cent, higher paperboard and packaging revenues and strong performance by the agri businesses.

The paperboards, specialty papers and packaging business recorded 25 per cent increase in revenues at Rs 700 crore (Rs 559 crore). The quarter witnessed a continuing trend of steep inflation in the cost of fuel and major raw materials.

Coal prices also increased, thereby, impacting the profitability of the business. “The business succeeded in partially neutralising cost pressures by optimising opportunity buying and increasing sales realisations,” the release pointed out.

The branded packaged foods business registered a sales growth of 24 per cent, while revenues from agri business segment grew by 17 per cent at Rs 864 crore (Rs 740 crore) driven by an impressive growth in leaf tobacco prices.

The hotels business posted a revenue growth of 10 per cent to touch Rs 228 crore (Rs 208 crore). “Despite the economic slowdown, de-growth in domestic air travel and lower growth in foreign traffic, the business registered a growth in occupancies and average room rates during the quarter,” the release said.

During the quarter, ITC Infotech (US), Inc, a subsidiary of ITC Infotech Ltd, acquired US-based Pyxis Solutions, a company specialising in quality assurance and testing.

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