HEG announces Rs 13.64 crore dividend, net profit up 37%
Shashikant Trivedi / Bhopal May 26,2004
The Mandideep-based HEG Ltd, a LNJ Bhilwara group company, has posted an increase of 37 per cent in net profit for 2003-04, which in value terms rose by Rs 51.02 crore.
HEG, Asia's leading graphite electrodes manufacturer, announced a dividend of 30 per cent for 2003-04, amounting to a total payout of Rs 13.64 crore. At Rs 12.66, the earning per share was 37 per cent higher. The profit before interest and tax was up by 9 per cent at Rs 68.36 crore.
The profit before tax expanded 50 per cent to Rs 60.64 crore. The interest cost declined 65 per cent to Rs 7.72 crore for the fiscal. Net revenues from core business improved to Rs 421.84 crore, mainly driven by a better performance of the graphite electrodes business.
Set up in 1977 in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie, a subsidiary of Pechiney of France, HEG has the largest integrated graphite plant in South Asia and the Middle East with a capacity of around 30,000 metric tonne a year.
The company's graphite division has facilities for production of graphite electrodes and graphite specialities. The company also operates a sponge iron plant and waste heat recovery system of 12.8 Mw at Borai in Chhattisgarh and a hydroelectric power generation facility at Tawa in Madhya Pradesh with a rated capacity of 13.5 Mw.
The performance during the quarter reflects the impact of reduced DEPB (Duty Entitlement Pass Book Scheme) rates and higher provision for deferred taxes, both of which occurred while the company continued to deliver products as per old contracts with its global customers.
Graphite electrode prices have been increasing internationally and all new contracts are at significantly higher prices. Going forward, as revenue inflows from new contracts accrue, a noticeable increase in realisations and earnings is expected.
Expanded capacities, the first phase of which may be completed by the fourth quarter of 2004-05 are likely to further enhance the company's revenues and earnings. Better graphite electrode realisations were likely to be the key contributor to financial growth in 2004-05, the company claimed.
HEG addresses a high quality global customer base, entering into long-term contracts with its key clients. The average realisations per tonne of graphite electrodes are expected to be higher in view of firming up of global prices.
The company's Phase I of expansion plan is scheduled to be completed sometime in Q4 of 2004-05 and is likely to contribute to additional sales in the same quarter.
Given the better price outlook for 2004-05 and marginally increased capacity availability, the company expects to report a growth-led performance in 2004-05.
Ravi Jhunjhunwala, chairman and managing director, HEG Limited, said, "FY2004 has been a good year for the company and the outlook for 2004-05 is even better. In order to sustain growth over the longer term, we have already initiated plans to double our capacities, increasing it from 30,000 MTPA (million tonne per annum) to 52,000 MTPA in the first phase of our capacity enhancement programme. We have created a global standing for ourselves and the demand and price drivers for the sector are positive. Given such an operating scenario and our confidence in our operations, we are positive about the outlook for the future."
HEG announces Rs 13.64 crore dividend, net profit up 37%
Shashikant Trivedi / Bhopal May 26, 2004, 00:01 IST
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