Oswal Chemicals Profit Vaults 152% To Rs 96 Cr

The net profit of Oswal Chemicals & Fertilizers Ltd has spurted nearly 152 per cent to Rs 95.82 crore for 1997-98 from Rs 38.06 crore in the previous year.

The board of directors of the company, which took on record the company's audited results for 1997-98 at its meeting in New Delhi yesterday, has announced a dividend of 40 per cent on the equity share capital, up from 23 per cent in the previous year, and 13 per cent on preference share capital.

The total dividend pay-out for 1997-98 works out to Rs 102.40 crore, up from Rs 63.74 crore in 1996-97.

 

The total turnover of the company has increased nearly 9 per cent to Rs 743.61 crore from Rs 683.45 crore, while the cash profit (gross profit after interest but before depreciation and taxes) has climbed up 19.6 per cent to Rs 287.78 crore from Rs 240.57 crore. The results have taken the retention price support on urea on the basis of the ad-hoc retention price notified by the government. Additional subsidy receivable after fixation of provisional/final retention price will be accounted for when it is notified.

OCFL managing director Abhey Oswal announced at a press conference yesterday that the company's cash cost of production was the lowest in the new generation gas-based fertiliser plants and compared favourably with international standards.

Meanwhile, OCFL has undertaken an expansion programme that will raise its fertiliser production capacity to 5 million tonne per annum by the end of year 2001. It has decided to put up the world's largest phosphatic fertiliser complex at Paradeep port in Orissa with a capacity of 1.92 million tonne per annum at a cost of Rs 1,830 crore.

The plant is being financed on a debt-equity ratio of 2:1, with the equity portion funded entirely through internal accruals. The company has so far invested Rs 475 crore in the project, of which Rs 125 crore is loan availed from banks and financial institutions at an interest rate of 16.5 per cent and the rest is from internal accruals. Oswal said the remaining amount to be brought in from internal accruals will be deployed by December 1998.

"Since the zero date of October 1997 for the plant, OCFL has achieved significant progress in implementation and the mechanical completion is expected in June 1999, followed by commencement of commercial production in September the same year," Oswal said.

The company has also decided to set up an ammonia/urea complex of 2.1 million tonne per annum with supporting offsite facilities at Talcher in Dhenkanal district of Orissa. The site is 5 km from Utkal coal block, which has been identified by the company for captive mining.

OCFL has tied up with Texaco of the US for coal gasification technology and will select a reputed technology licenser for ammonia and urea processes.

This project envisages a total investment of Rs 5,150 crore, which is proposed to be financed with a debt-equity ratio of 2:1. The completion of the project is scheduled for December 2001.

"The internal accruals from existing operations together with accruals from the phosphatic fertiliser plant will enable OCFL to contribute the required resources for the coal-based project without resorting to any public issue of equity shares," Oswal said.