Chennai, June 18: Southern cement major India Cements Ltd (ICL) has reported a marginal 3.2 per cent increase in turnover from Rs 806.44 crore in the last financial year to Rs 832.5 crore this year. The company, however, improved its operating margins by 11.28 per cent. The increase in operating profits was attributed to efficient utilisation of power. Interest costs increased by Rs 8.53 crore and depreciation was also higher by Rs 7.5 crore.

The net profit increased marginally from last year's Rs 80.90 crore to Rs 82.58 crore. The company's board has recommended a 30 per cent dividend. Interestingly, minimum alternate tax (MAT) has been treated as advance tax and a reserve of Rs 10.75 crore created. Had it been included in the profit and loss statement, it would have eroded the bottomline.

Speaking to newsmen, N Srinivasan, vice-Chairman and managing director, said the performance of the company was very good given the sluggish market conditions. The results could have been better but for the downtrend in the shipping division's bottomline, he said.

Real estate, too, recorded a decline in performance and the foundry division's performance ``was not up to expectations''. The company would have to be re-engineered before it could be turned into a profitable venture, he said. As a first step, a massive downsizing of the labour force was under way. Once this was completed, the project would be re-evaluated, he said.

Earlier this year, India Cements reduced its workforce by 25 per cent. As far as the current year is concerned, the takeover of the Yerraguntla cement plant is on the cards. Stating that ICL was confident of bagging the project, he said the company was awaiting government decision.

India Cements had put in a bid of Rs 198 crore for the Yerraguntla cement plant in Andhra Pradesh as it has a production capacity of 4 lakh tonnes per annum. If the bid comes through, the funds would be raised through debt financing. He ruled out a GDR issue, which would further dilute the equity.

He also said the GDR route would be unsuitable, given the fact that the company's scrip was being discounted at ``absurdly low levels'' in the stock market. Another project in the offing is a 60-MW captive power plant which would meet the company's power requirements. The proposal was under consideration and project viability was being worked out by a consultancy firm, he said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.