ACC's turnaround performance

By Our Staff Correspondent

MUMBAI, APRIL 30. The Associated Cement Companies (ACC) has announced a net profit of Rs. 51.13 crores for the year ended March 2001 against a loss of Rs. 58.85 crores in the previous year. The board has announced a dividend of 20 per cent.

Net sales were Rs. 2,959.03 crores against Rs. 2,701.81 crores, dividend and interest was Rs. 10.74 crores (Rs. 5.51 crores). Other income amounted to Rs. 61.99 crores (Rs. 53.10 crores). Total expenditure during the year was Rs. 2,626.17 crores (Rs. 2,532.99 crores).

The profit before interest, depreciation and tax, was higher at Rs. 405.59 crores against Rs. 227.43 crores. The company was able to achieve this despite various increases in cost of major inputs beyond its control, which were compensated by effecting improvements in operational efficiencies. The company was able to reduce the cost of power by Rs. 42 crores, fuel by Rs. 7 crores and in manpower by Rs. 14 crores due to the impact of the reduction in workforce of over 4,000 over the last three years.

After providing Rs. 170.18 crores (Rs. 161.77 crores) for interest, the gross profit was higher at Rs. 235.41 crores against Rs. 65.66 crores. The company provided Rs. 141.28 crores (Rs. 124.51 crores) for depreciation. This higher amount is due to the commissioning of Chanda, Madukkarai and various other projects and full year impact of captive power plants of 25 MW each at Jamul and Kymore commissioned in November 1999.

Interest charges were higher at Rs. 170.18 crores (Rs. 161.77 crores) on account of the commissioning of the projects. The company provided Rs. 43 crores (nil) for exceptional items and Rs. 3.65 crores (nil) for tax. This was on account of the closure of the synthetic ferric oxide plant due to adverse market conditions and unremunerative prices. For this, an amount of Rs. 30 crores has been charged to profit and loss account towards `write down of assets.'

In order to meet the adverse impact, if any, in respect of the company's investment in its subsidiary, an additional provision for contingency of Rs. 13 crores (net) has been made during the current year.

During the year, ACC's sale of traded cement (excluding traded cement) was 10.23 million tonnes (99.46 lakh tonnes). Sales of traded cement were 8.21 lakh tonnes (7.77 lakh tonnes). Clinker production at 8.21 million tonnes was marginally higher as compared to the previous year. The output of cement was 10.21 million tonnes (10.04 million tonnes).

The turnover of the refractory business improved to Rs. 194 crores from Rs. 187 crores. The volume of sales including captive requirement was 1.19 lakh tonnes (1.15 lakh tonnes). The higher growth in volume is mainly due to introduction of basic monolithics and new products manufactured at the Nagpur refractory unit with Harbison Walker and TRB technology. During the year, ready mix concrete business' turnover was Rs. 91 crores (Rs. 76 crores).

The research and consultancy directorate covered a variety of services and total income was Rs. 58.14 crores (Rs. 51.97 crores). The company has been managing a cement plant owned by Yanbu Cement Company, Saudi Arabia, for the past 21 years. The company achieved guaranteed production for the 11th successive year earning bonus of Rs. 1.86 crores.

Projects for improvements in capacity and modernisation were completed during the year at Chanda, Madukkarai and Gagal. The new project at Wadi has been commissioned for trial production and is to go on full stream soon. With the commissioning of this plant, the company's installed capacity is the highest in the industry at 15.3 million tonnes. The construction of 15 MW thermal power plant at Chanda Cement Works is progressing and will be completed according to schedule. A similar capacity power plant is planned at Madukkarai.

MRO-TEK

The Bangalore-based MRO-TEK, networking and access solution provider, MRO-TEK, has reported a total income Rs. 124.86 crores for the year ended 2000-01, an increase of 18 per cent as compared to the previous year. Though the profit, before tax, has risen by over 30 per cent to Rs. 28.80 crores, the profit, after taxation, has increased by 14 per cent to Rs. 18.24 crores from Rs. 15.98 crores, due to increase in incidence of taxation. Net earnings per share stood at Rs. 8.94.

The board has recommended a final dividend of 15 per cent for 2000-01. Earlier the company had paid an interim dividend of 5 per cent on par value of Rs. 5 per share.

Mr. S. Narayanan, Chairman and Managing Director, MRO-TEK LTD, said, "Due to unforeseen delays in certain customers' projects and delays in issuance of policy guidelines by the Government have forced customers to delay their orders, which in-turn lowered top line growth against expectations, however we have achieved net profit of 15 per cent as projected." With the challenging global scenario, the company hopes to achieve 30 per cent growth in top line as well as in the bottom line for the 2001-02.

MRO-TEK, through its multiple strategic alliances, has marketing rights of several networking products. Currently, trading accounts for nearly 60 per cent of the revenue and manufacturing 40 per cent. The company's main asset was understanding of technology and the ability to customise products to suit Indian conditions.

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