Indal Net Profit Slumps By 50 Per Cent To Rs 59 Crore

Indian Aluminium Company (Indal) has recorded a drop of around 50 per cent in its net profit for the financial year 1996-97. The company earned a net profit of Rs 59.1 crore as against Rs 114.2 crore recorded in 1995-96. The gross sales revenue, however, registered a small increase of 2 per cent to touch Rs 1139.9 crore.

In the board meeting held in the city yesterday, Indal's board of directors approved the annual results of the company for 1996-97, and recommended a final dividend of Rs 2 per ordinary share of Rs 10 each which, along with the interim dividend of Rs 2 per share, makes the total dividend of Rs 4 per share. The companys paid up equity stood at Rs 71.1 crore for the previous fiscal. The board is due to meet for the annual general meeting on July 25.

 

Tapan Mitra, vice chairman and managing director of Indal, while addressing a press conference yesterday, attributed the poor performance of the company to low world prices and slow demand growth.

The administered cost increases of coal, petroleum and power acted as added deterrents to the company's metal production by around 20,000 tonnes, he added. However, the company's performance in special alumina exports increased by about 12 lakh tonnes over the last fiscal. Inventories by way of dues to sundry debtors also came down by 10 per cent, Mitra said.

According to S M Dutta, chairman, the previous fiscal exhibited two key developments which took their toll on the profit margins --- cyclical process of price reduction and general slowdown in the offtake of industrial products.

Added to this were the factors of over-supply of products in the market and growth in the manufacturing sector being well below the double digit figure, he said.

During the previous fiscal, the domestic industry in general felt the pinch of inadequate infrastructure, primarily power, Dutta said. The aluminium industry was also the recipient of a 20 per cent reduction in the tariff structure, especially in the semi-fabricated products segment which is Indal's core business.

However, the company was optimistic that the same conditions would not recur in the present fiscal. Dutta expressed hope that given the right conditions, the Indian aluminium industry, with the largest bauxite deposits in the world at its disposal, would emerge as a major competitive industry from India.