MUMBAI, June 20: National Organic Chemical Industries Ltd (Nocil), belonging to the Arvind Mafatlal group, has posted a 34.38 per cent drop in net profit to Rs 59.81 crore for the year ended March 1997 from Rs 91.15 crore last year.

Net sales too fell marginally by 2.5 per cent to Rs 1,174.33 crore during the period as against Rs 1,204.33 crore in the previous year. The company has recommended a dividend of 25 per cent (including 10 per cent interim dividend declared in November 1996) which is the same as last year.

Operating profits fell 32.7 per cent to Rs 113.59 crore from Rs 168.82 crore in the previous year. Operating profit margins fell drastically to 9.6 per cent from 14 per cent. Net profit margins dropped to 5 per cent from 7.5 per cent during the period.

Earnings per share (EPS) dropped to Rs 4.88 as against Rs 7.43 last year. Provision for taxation was lower at Rs 18.6 crore as against Rs 56.40 crore last year. Depreciation was higher at Rs 15.78 crore as compared to Rs 13.71 crore in the previous year.

According to a company press release, the marginal decline in turnover was mainly due to lower sales volumes of petrochemical and polymer divisions consequent to the planned maintenance shutdown undertaken in March 1997 and the steady decline in international prices of petrochemicals during the latter half of the year.

It said that the margins in petrochemical and polymer business were further affected due to the hike in the administered price of naphtha and other inputs in July 1996.

The company said that it has initiated various measures to improve operational efficiencies. It said that the rubber chemicals division posted a healthy growth in volumes with sales touching Rs 169 crore.

Regarding Nocil's plans for a financial and technical joint venture, the company said that negotiations with foreign partners for participation in the modernisation-cum-expansion project at Thane near Mumbai are in progress. They said that a final decision in this respect will be taken shortly. "The nature of participation by potential partners will be known only after a memorandum of understanding is finalised.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.