Tisco profit down 31%, dividend cut

MUMBAI, May 28: The directors of Tata Iron and Steel Company (Tisco) have cut the dividend by five per cent to 40 per cent for the year ende...

MUMBAI, May 28: The directors of Tata Iron and Steel Company (Tisco) have cut the dividend by five per cent to 40 per cent for the year ended March 1998 in view of the 31 per cent fall in the net profit.

Sale of products and services showed a modest increase of 1.3 per cent to Rs 6,433.49 crore (Rs 6,351.46 crore). The total export turnover was higher by 9 per cent at Rs 722.21 crore. The other income during the year amounted to Rs 83.09 crore (Rs 57.97 crore). As a result, the total income amounted to Rs 6,516.58 crore against Rs 6,409.43 crore last year.

The net realisation was under pressure due to intense competition and sluggish demand. Consequently, the operating profit dropped to Rs 995.34 crore from Rs 1164.13 crore last year.

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The provision for depreciation amounted to Rs 343.23 crore (Rs 326.83 crore) and employee separation compensation amounted to Rs 112.19 crore against Rs 78.70 crore. The profit before tax dropped to Rs 363.33 crore from Rs 542.21 crore. After providing a sum of Rs 41.25crore (Rs 73 crore) for taxation, the net profit dropped to Rs 322.08 crore from Rs 469.21 crore last year.

After certain provisions and adding a brought forward amount of Rs 82.42 crore (Rs 68.40 crore) from the previous year, the disposable profit amounted to Rs 333.50 crore against Rs 414.65 crore. The proposed dividend will absorb Rs 147.25 crore (Rs 165.66 crore) and tax on dividend at Rs 14.73 crore (Rs 16.57 crore). A sum of Rs 90 crore (Rs 150 crore) has been transferred to general reserve and balance surplus of Rs 81.52 crore has been carried forward.

According to the management, despite a slowdown in industrial growth, resulting in a decline in consumption of steel in the domestic market, it recorded a growth of 9.74 per cent in sales volume to 2.388 million tonnes (2.176 million tonnes) increasing its market share.

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