Carborundum net up 61%

CORPORATE SCORECARD

Carborundum Universal has recorded 61 per cent increase in net profit to Rs 17.40 crore for the fourth quarter ended March 31, 2007, from Rs 10.83 crore in the corresponding period of the previous year.

During the quarter, net sales grew by 22 per cent to Rs 147.66 crore from Rs 120.97 crore for the corresponding quarter last year. Profit before interest and tax (before exceptional items) increased by 24 per cent, while profit before tax grew by only 12 per cent due to higher interest costs resulting from large capital investments. For the year ended March 31, 2007, net profit declined by 23 per cent to Rs 58.66 crore, compared with Rs 76.61 crore in the previous year.

Capitalising on the buoyancy in the economy and stepped-up performance in the export market, annual net sales in 2006-07 recorded a 24 per cent growth to Rs 526.77 crore from Rs 424.24 crore in the year-ago period.

The company's domestic sales grew by 21 per cent from Rs 378 crore to Rs 456 crore this year. Strong growth was witnessed in all the three business segments - abrasives (21 per cent), ceramics (17 per cent) and electrominerals (32 per cent) "� of the company. Sales growth was driven by good order inflow from all customer segments, the company said.

Exports increased from Rs 47 crore to Rs 71 crore, a growth of 52 per cent. The upgradation and expansion of the company's manufacturing facilities in India over the last two years helped to foster exports growth.

Profits from operations before interest and tax and excluding profits on sale of fixed assets and investments registered a strong growth rate of 24 per cent.

Interest costs rose by over 150 per cent in 2006-07 as a result of aggressive capital investments in building a strong back-end, the benefits of which would be reaped over the next one to three years, the company added.

Consolidated annual net sales of the company for the year ended March 31, 2007 increased by 25 per cent to Rs 617.22 crore from Rs 494.20 last year.

Investments for scaling up and upgrading production facilities were undertaken across all the business segments during 2006-07.

A total capital expenditure of Rs 108 crore was incurred during the year, taking the total investment in capital expenditure during the last three years to Rs 215 crore.

The company completed the acquisition of 49 per cent stake in Sanhe Yanjiao Jingri Diamond Industrial Company (Jingri) in October 2006. The acquisition has fulfilled the long felt need for a Chinese manufacturing base. The joint venture is in the process of setting up a bonded abrasive manufacturing facility for commissioning in 2007-08.

The board of the company has recommended a dividend of 75 per cent for the year. The company also plans to foray into the power tools business this year.