Century Centenary Bonus

In fact, despite a marginal increase in sales by 11.92 per cent to Rs 1990.20 crore, Centurys net profit declined drastically by 98.6 per cent to Rs 2.67 crore. Operating profit margins, too, have declined drastically from 18.95 per cent to 14.53 per cent.

The company attributes this poor performance to a host of reasons like adverse market conditions prevailing in the cement and paper sectors, teething problems at its paper plant, steep decline of freight rates and, most important, the severe power cuts.

The increase in interest burden by 218.77 per cent to Rs 162.69 crore also has taken its toll on Centurys bottomline. The company, which required huge funds to meet working capital requirements for its new cement and paper projects, was forced to pay up a hefty amount as interest, thanks to the high interest rates prevailing in the market.

 

Depreciation increased by 36.12 per cent to Rs 123.74 crore mainly due to the commissioning of the new cement and paper projects during the year. However, the tax liability remained at the same level of Rs 0.15 crore. In fact, the company is coughing up money from its reserves to meet its obligations on the dividend front, which will be to the tune of Rs 27.91 crore.

Surprisingly, according to the latest budget, the tax on dividend according is Rs 2.79 crore, which is higher than the net profit figure.

The company, in order to save itself from going into the red, is taking up a modernisation programme. In order to tackle the power problem, it is commissioning captive power plants at its two cement divisions. Though the company is of the view that there has been some improvement in the cement and paper industries, analysts disagree. They point out that it would take some time for these industries to pick up and the company's fortune to take a reversal. In view of these poor results the scrip may continue to be subdued.