ITC profits climb up by 37% to Rs 2,191 crore

Our Kolkata Bureau

ITC Ltd on Friday reported a 37.57% rise in net profit to Rs 2191.40 crore for the year ended March 31, 2005, compared to a Rs 1592.85 crore the previous year. The higher the net profit follows a 12.83% growth in ITC's gross sales revenue during the fiscal at Rs 13585.39 crore (Rs 12039.92 crore).

The company has convened a board meeting on June 17 to consider a bonus issue, stock split and an increase of authorized share capital, it said in a notice sent across to the stock exchanges. Net revenue during the year under review was up by 17.62% to Rs 7875.26 crore (Rs6695.32 crore). While pre-tax profit (before exceptional items) at Rs 1837 crore registered a growth of 15.3%.

The board has recommended a dividend of Rs31 per share of Rs 10 each for the year entailing a cash flow of Rs 881.69 crore. While cigarettes sales grew by 8.4% over the previous year, the non cigarette businesses grew by 29.5% primarily due to the strong performance of the hotels business, impact of amalgamation of ITC Hotels and Ansal Hotel with the company, strong growth in paperboards and the ramp up of the new FMCG businesses, ITC said in a statement issued after the board meeting held in Kolkata on Friday.

The success of the company's strategy of creating multiple drivers of growth by leveraging the diverse competencies residing in its portfolio of businesses is evident in the growing share of the non-cigarette businesses. Over the last five years, net turnover of the non-cigarette businesses has tripled to touch Rs 3197 crore in 2004-05. Despite accounting for expenses for product development and brand building of the new FMCG businesses, operating profit of the non cigarette businesses has grown at a CAGR of 28% to Rs 587 crore in 2004-05.

A study of the segments results indicate revenue from the hotels business grew by 124.14% to Rs 577.25 crore. Company officials attributed the growth to improved occupancies, higher realizations and impact of the amalgamation. Profit before interest and tax (PBIT) stood at Rs 140.94 crore (Rs 32.51 crore) despite absorbing the gestation impact of new projects.

Capacity augmentation in the recycled paperboards, successful integration of the Kovai facility and commissioning of the 75000 tonnes per annum (tpa) paperboard machine at the Bhadrachalam mill improved the company's overall sales by 30%. While revenue grew by 24.89% to Rs 1565.31 crore, PBIT was up by 21.81% to Rs 279.99 crore during the year.

Gross turnover of ITC's cigarette business crossed the Rs 10000- crore milestone driven by domestic volume growth of 6.5% during the year under review. "This volume growth was aided by a period of stability in the excise tax regime, which in turn imparted buoyancy to tax revenues from the tobacco sector," the company stated.