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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9172)	10/29/1999 8:56:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

CHEMPLAST Sanmar (SANMAR Group) Ltd H1 net up 133 per cent Sanmar Group sanmargroup.com Chemicals sanmargroup.com CHENNAI: Aided by a 65 per cent reduction in depreciation costs and 42 per cent drop in interest charges, Chemplast Sanmar Ltd's net profit more than doubled to Rs. 20.42 crores in the first half of the current year, from Rs. 8.76 crores in the same period last year. Further, consequent upon the hive-off of the shipping division, there were no `bareboat charges'. Comparatively, bareboat charges had amounted to Rs. 5.86 crores in the first half of last year. According to a press release from the company, this has been possible ``mainly due to 100 per cent capacity utilisation, improved realisations and the positive impact of the restructuring scheme completed last year.' The company's Executive Director (Finance) Mr. P.S. Jayaraman, told Business Line, that the restructure exercise had helped bring down the interest costs. After the shipping division was hived off into a separate company, the new company (Sanmar Shipping Ltd) came out with a public issue of shares. Out of the proceeds of the issue, it paid its dues to the parent company, Chemplast Sanmar. Chemplast used these funds to pay off high cost debts and this was mainly why interest charges dropped by 42 per cent. The company's turnover declined to Rs. 183.14 crores, from Rs. 242.62 crores in the first half of 1998. Other income also dropped to Rs. 0.68 crore, from Rs. 4.22 crores. Total expenditure was Rs. 135.38 crores (Rs. 174 crores). In the PVC business, realisations improved due to higher international prices. However, the domestic prices of caustic soda continue to remain low due to over capacity and soft international prices, the release says. The release also cautions that the second half of the year would be impacted by the steep increase in prices of LSHS/furnace oil as a result of the escalating crude prices in the international market. ``This will reduce the significant savings that the company enjoys on account of its 100 per cent captive generation unit,' the release says. Mr. Jayaraman said that even with the increase in the prices of the power plant fuels, the company found it cheaper to operate with captive power than buy power from the grid. Very high prices of raw materials (ethylene di chloride) internationally are affecting margins in the domestic PVC industry, it adds. Asked about the proposed greenfield PVC plant, Mr. Jayaraman said that the company had commissioned studies to assess the feasibility of the project. By the end of the current calendar year, the company would have a clear idea about the feasibility of the project, he said. (10/30/99-BL)