EID Parry cuts cost to boost profits by 28

CHENNAI, May 18: By keeping a tight control on its fixed costs and running its plants in an efficient manner, EID Parry India has been suc...

CHENNAI, May 18: By keeping a tight control on its fixed costs and running its plants in an efficient manner, EID Parry India has been successful in recovering its overheads to post a 28 per cent increase in its net profit on a turnover which improved by only 20 per cent.

The board of directors have declared a dividend of Rs 5 per share compared to Rs 4 per share declared in the previous year. The earnings per share works out to Rs 20.37 Rs 15.46.

For the year 1997-98, the turnover has improved to Rs 913.03 crore Rs 761.03 crore in 1996-97 thanks to higher realisation from sugar and better sales performance of fertiliser, pesticide, chemical and sanitary divisions.

The operating profit in percentage terms increased to 10.30 per cent compared to 7.40 per cent in 1996-97. 8220;This has been possible due to tight control on cost in spite of the fact that we have increased capacity and commissioned new units8221; said D Kumaraswamy, general manager finance.Interest at Rs 37.80 crore Rs 22.74 crore washigher essentially due to the fact that projects which were funded by borrowings went on stream. Depreciation was also higher at Rs 30.85 crore Rs 19.31 crore due to capitalisation of completed projects. A minimum alternate tax MAT of Rs 4.40 crore Rs 4.50 crore has been provided leaving a net profit of Rs 38.58 crore Rs 30.08 crore.

The margins at operating levels improved due to higher sugar recovery. Though the quantum of cane crushed declined by 17.8 per cent, the sugar produced fell only by 13.97 per cent indicating significant improvement in recovery levels. Added to this, the Ennore fertiliser factory achieved peak levels of production thereby effectively recovering the overheads.

Good export orders for technical grade pesticide and better selling price for acetic acid also helped in improving the margins. During the year the co-generation plant chipped in its bit by exporting about 3.5 lakh units to the grid.