Sharp fall in Grasim's Q2 profit

By Our Special Correspondent

MUMBAI, OCT. 31. Grasim Industries recorded a fall in net profit at Rs. 31.6 crores for the quarter ended September 30, 2001 compared to Rs. 76.4 crores in the corresponding period last year.

However for the half year ended September 30, 2001, it recorded a net profit of Rs. 133.87 crores as compared to Rs. 131.10 crores in the corresponding period last year.

Announcing the financial results, Grasim's Group Executive President & CFO, Mr. D. D. Rathi said that as part of its restructuring, Grasim has shut down its Mavoor plant. Consequently, the company has provided for an extraordinary charge of Rs. 37 crores towards payment to the 2,300 employees and write down in the value of fixed assets retired from active use.

As part of its endeavour towards manpower rationalisation, a sum of Rs. 15 crores has been paid towards VRS at its other plants. These are mentioned as extraordinary item in the balance sheet.

However, for the quarter ended September 30, 2001, the net profit after total taxes but before extraordinary items recorded at Rs. 84 crores compared to Rs. 82.8 crores.

Mr. Rathi also said that these actions would add to the company's financial strength and improve its operating profits. The closure of Mavoor plant alone would result in savings in recurring expenditure on employees and other standing charges to the tune of Rs. 27 crores annually.

Grasim, maintained its turnover at Rs. 1,207 crores for the quarter ended September 30, 2001 compared to Rs. 1192 crores in the corresponding period last year.

The gross profit was up by three per cent at Rs. 163 crores. ``The economic slowdown has adversely affected growth in the fibre and sponge iron sector. But for this, the Grasim performance would have been much better,'' said Mr. Rathi. ``Superior performance from its cement business, cost optimisation and a substantially reduced interest burden helped Grasim post a positive bottomline,'' Mr. Rathi added.

Grasim has initiated several measures to increase productivity, optimise costs and expand its markets aggressively. Towards these, Grasim is implementing various plans entailing a capital outlay of Rs. 530 crores.

On completion of these projects, Grasim's cement manufacturing capacity will stand raised to 13.16 million tonnes by December 2002, an increase of 33 per cent over the capacity as on March 2001. A substantial part of the capex will be met from internal accruals. During the first half of the current fiscal, Grasim has spent Rs. 119 crores on the projects.

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Section  : Business
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