The drop in net profit was on account of a lower price realisation and depressed market conditions, says a release. The company's turnover, however, has increased 36 per cent to Rs 725 crore, from Rs 535 crore. Interest and depreciation stand at Rs 39.55 crore and Rs 38.15 crore respectively.

The scheme of amalgamation of Rajashree Polyfil with the company has been completed, and is effective, April 1, 1997. The amalgamation is expected to provide advantages to the company. The product range is widened with the addition of substantial capacities ofPoY and polyester chips.

The company has lowered the prices of end products for parity with the landed cost of imports. The offtake of tyre yarn and tyrecord fabrics was lower by 12 per cent, versus the previous year, says the release. Commercial production of Rajashree Polyfil commenced on May 20, 1997. After initial teething problems, the products of this division have been well received by the market.

Insight

Despite a massive 36 per cent increase in turnover, Century Enka's bottomline has shrunk to a fourth of that posted in the previous year.

Rajashree Polyfil was amalgamated into the company with effect from April 1, 1997, with the expectation that this would improve its performance. However, low prices of polyester yarn, owing to overcapacity and slack demand for tyrecord fabrics and tyre yarn, led to a lower operating profit.

The trebling of interest outgo and doubling of depreciation (mainly as a result of the amalgamation) have also eaten into the profits of the company. Thecurrent year is likely to be a challenging one, too, considering that import of nylon cord has been exempted from the special 8 per cent duty and overcapacity in polyester yarn is expected to persist.