L & T profits dip in Q3, major restructure unveiled

By Our Staff Correspondent

MUMBAI, JAN. 14. Larsen & Toubro has announced a net profit of Rs. 19.34 crores for the quarter ended December 31, 1999 against Rs. 63.56 crores in the corresponding period last year. Net sales were lower at Rs. 1,718.55 crores against Rs. 1,789.26 crores.The company provided Rs. 91.81 crores (Rs. 35.85 crores) for interest, Rs. 21.50 crores (Rs. 69.96 crores) for depreciation and Rs. 2.16 crores (Rs. 6.40 crores) for tax.

For the nine months ended December 31, 1999, the net profit was lower at Rs. 186.20 crores against Rs. 262.27 crores in the corresponding period last year.

The company has announced a major restructuring plan today that will transform the engineering, construction and cement major into a knowledge-based `premium conglomerate'.

The plan consists of four key elements - shape and structure of the overall portfolio, value creation plans for each business, corporate and organisation structure and internal value based management processes.

The blueprint foresees that in the long term, the company portfolio will consist of an engineering core and two thrust areas: cement and information technology and communication.

While the company already has a 100 per cent subsidiary in information technology (LTITL), it is also assessing entry into other IT and communication services in its value creation pursuit. This entry will contribute to a longer term portfolio migration towards knowledge-based, fast growing business. As part of the blueprint, the company will continue to evaluate its other diversified operations and joint ventures from a value creation perspective, a phased plan to reduce exposure to some of these business has already been designed.

According to Mr. Naik, ``This overall corporate structure will not only increase the transparency of operations but also enable shareholders to track and directly invest into the high-profile cement and information technology and communication businesses of the company.''

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Section  : Business
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