CHENNAI, June 23: Despite a 6.5% growth in the turnover, Madras Cements net profit dipped by 14.47 per cent. While the income from sales grew by 6.5 per cent to Rs 404.07 crore from Rs 379.46 crore, other income also increased by Rs 2.99 crore during the period under review. The operating margin increased by 2.1 per cent to Rs 139.75 crore as against an operating profit of Rs 136.81 crore.

But a nearly 60 per cent jump in interest costs and a 24 per cent hike in the depreciation costs eroded the bottom line and the net profit stood at Rs 77.74 crore, a Rs 13 crore decrease from last year's profit figure of Rs 90.90 crore.

The board has recommended a 55 per cent dividend payment. The company commissioned a 9 lakh tonne capacity plant in Alathiyur in Perambalur Thiruvalluvar District at a cost of nearly Rs 350 crore. The borrowing for the new project resulted in an inflated interest cost, say company sources.

The Rs 10.03 crore tax liability of the company under Minimum Alternate Tax (MAT) has been treated as Advance Tax.

Had this too been considered in the profit and loss account, then the bottomline would have been much lower.

On an equity base of Rs 11.98 crore the earning per share (EPS) stands at Rs 64.89. For the forthcoming year Madras Cements will see an increase in production levels, with the new plant going on-stream commercially.

The company will also start work on another new plant in its RR Nagar complex, which will have a capacity of 6 lakh tonnes and a project cost of Rs 135 crore. The project will again be funded by a combination of debt and internal accruals which will see a further increase in the interest costs of the company.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.