Century posts Rs 38.5 crore loss

The company has reported a net loss of Rs 24.77 crore on a turnover of Rs 486.27 crore for the second quarter ended September 30, 1998, according to a company release. However, the release does not mention comparative figures for the previous year.

According to a company director, recession in the cement and paper industries is the major factor behind the slide, adding that unless the government does its bit to tone up the infrastructure the situation will remain unchanged.

Gross profit after interest but before depreciation and taxation stood at Rs 33.63 crore for the six months ended September 30, 1998, against Rs48.83 crore during the same period last year. The gross profit for the second quarter stood at Rs 11.58 crore.

Expenditure for the six-month period was Rs 883.04 crore against Rs 848.47 crore during the corresponding period last year. Interest was Rs 106.09 crore, compared with Rs 100.32 crore in 1997-98. Interest for the second quarter was at Rs 52.19 crore.

Depreciation stood at Rs 72.09 crore (Rs 69.91 crore). The paid-up equity share capital of the company for the six-month period was Rs 93.04 crore, compared with Rs 46.52 crore during the same period last year. Other income at Rs 13.67 crore includes the surplus arising from the sale of a ship.

The pressure on Century’s profit margin did not come as a surprise as the cement and textile sectors have been reeling under the economic slowdown. While sales grew by 2.5 per cent in the first half of 1998-99, operating profit margins declined from 12.03 per cent to 10.68 per cent. Higher interest burden further made their contribution. As far as the jumpin the stock price of Monday goes, it was backed purely by improved sentiment. At a higher level, the stock is bound to face selling pressure.