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ITC net profit up 18 pc to Rs 6.23 billion; 55 pc dividend for 1998-99

Rakesh Dubey in Calcutta

Cigarette major ITC Limited has reported 18 per cent jump in net profit at Rs 6.23 billion during 1998-99 compared with Rs 5.26 billion in 1997-98.

Official sources said after a board meeting today that directors have recommended a dividend of 55 per cent to share holders for the fiscal.

Net income of the company increased by 12.61 per cent to Rs 35.15 bilion from Rs 31.40 billion last year while gross profit increased by 19 per cent to Rs 10.40 billion in 1998-99 from Rs 8.77 billion, sources said.

Total expenditure during the year increased to Rs 24.43 billion from Rs 22.71 billion while interest burden almost doubled to Rs 1.53 billion from Rs 810.2 million last year, sources added.

After making a provision of Rs 1.02 billion (Rs 858.5 million) for depreciation, profit before interest and tax increased by 25 per cent to Rs 10.91 billion against Rs 8.72 billion last year, sources said.

The company has made a higher provision for taxation of Rs 3.14 billion (Rs 2.65 billion), sources said.

About Rs 1.60 billion was brought forward from the previous year and after positive adjustment for hotel foreign exchange of Rs 5.9 million, Rs 7.84 billion (Rs 6.47 billion) was available for appropriation this year, sources added.

Out of the available reserve of Rs 7.84 billion, Rs 487.5 million (Rs 550.5 million) was transferred to Debenture Redemption Reserve, Rs 600 million (Rs 1.10 billion) to Contingency Reserve, Rs 4 billion (Rs 2 billion) to General Reserve and Rs 1.87 billion (Rs 1.60 billion) was carried forward to next year.

Dividend, including tax on it, will take away Rs 1.49 billion (Rs 1.21 billion last year), sources added.

The company was implementing a comprehensive programme towards eliminating any known risks to its computer systems and equipment that could adversely impact its businesses continuity due Y2K issue, sources said.

As soon as the results reached the Calcutta Stock Exchange at 1210 hours IST, the price of its scrip, which was hovering around Rs 1,086, jumped to Rs 1103, but came down later to be quoted at Rs 1,079 around 1330 hours.

Notwithstanding the sluggish economic condition almost throughout the year, the ITC's foreign exchange earnings (through exports of leaf tobacco, cigarettes and agricultural products besides through its hotel business) went up to Rs 7.56 billion.

However, during the past one decade, the company's total foreign exchange earnings had crossed the $ 1.8 billion mark.

However, the near doubling of the interest cost which took the full impact of restructuring of the financial services business carried out last year, neutralised the surge of 25 per cent in profit before interest and tax which at Rs 10.92 billion crossed the Rs 10 billion mark.

ITC had strengthened its leadership position in cigarette business, specially in the filter and premium segments; a similar growth in the company's hotel business was also being maintained, a spokesperson said.

UNI

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