State-run trading firm MMTC,which is a disinvestment candidate for the current fiscal,on Tuesday reported a sharp fall of 88 per cent in its net profit for the first quarter of 2011-12. The net profit for the first quarter for this fiscal fell to Rs 6.47 crore from Rs 55.23 crore in April-June 2010-11 due to ban on iron ore exports,MMTC said in a filing to the Bombay Stock Exchange (BSE). The fall in profit came despite a huge jump in business turnover,which rose by 69 per cent per cent to Rs 20,421.27 crore in the period under review. The reason for decline in net profit is mainly due to ban on iron ore exports (as it has high contribution in country's profit), a senior company official said. Total expenditure has increased by 70 per cent to Rs 20,430.25 crore during April-June this fiscal. The expenses have seen an all round jump,including the employee cost which has gone up to Rs 54.82 crore for the quarter against Rs 37.85 crore in the same period last fiscal. The Board of Directors of the company have recommended a dividend of 25 per cent. However,this relates to the previous fiscal year ended March 2011. The earning per share (not annualised) came down from Rs 11.05 to Rs 0.06,which could be a dampener for the company in which government wanted to disinvest 10 per cent of about 99 per cent holding this year. The profit is expected to hit in the second quarter also,the official added. Shares of MMTC on Tuesday closed at Rs 876.35 on the BSE,down 0.71 per cent from its previous close.
