Our Kolkata Bureau
22 May

ITC Ltd posted a net profit of Rs 1189.72 crore in the financial year ended March 31, 2002. This represents a growth of 18.23 per cent over the net profit of Rs 1006.26 crore the previous year. The company's board of directors have recommended a dividend of Rs 13.50 per share for the fiscal 2002.

However, in terms of percentage change in annual net profit over the years, 2001-02 has been by far ITC's lowest. From Rs 623.42 crore in 1998-99, the net had jumped by 27.1 per cent to Rs 792.44 crore in 1999-2000. Next year, it again went up by another 27 per cent to Rs 1006.26 crore in 2000-'01.

This year, the rise over last fiscal's net profit level has been well short at 18.23 per cent. But as ITC goes on to explain, the actual growth in net this year, has been 22 per cent after adjustment of the effects of amalgamation of ITC Bhadrachalam Paperboards Limited which became effective in March 2002 and after setting off a few other "one-off items". Despite that, the growth this year in net profit has been lower.

On a fourth quarter basis also, ITC's growth this year has been far lower compared to previous years. Q4 March 2000 showed a 63.4 per cent rise in net profit at Rs 224.93 crore (Rs 137.64 crore), while Q4 March 2001 showed a 23.2 per cent rise at Rs 277.07 crore. Compared to this, Q4 March 2002 at Rs 296.21 crore is just a 6.9 per cent rise over corresponding period of last year.

Among the four quarters of 2001-'02, June quarter had ended with a net profit of Rs 300.67 crore followed by an 11 per cent rise to Rs 333.61 crore in September quarter, a decline of 22.3 per cent in the December quarter to Rs 259.23 crore from where in the March quarter, ITC has made a marginal gain of 14.26 per cent to Rs 296.21 crore.

The jump in net profit was attributed to severe cost and revenue pressures stemming from a steep increase in cigarette taxes, the tobacco crop holiday in Andhra Pradesh, the gestation of new hotel investments and the incubation of new businesses, the company said in a statement issued after its board meeting held in Kolkata on Wednesday.

However, segment-wise results show that in "other fast moving consumer goods (FMCG) products" like branded garments, greeting cards and gifts, and branded packaged foods, ITC suffered a loss of Rs 73.44 crore for the whole year and Rs 24.50 crore for Q4 ended March 2002. This, in fact, has pulled down its FMCG profits to Rs 1619.67 crore for the whole year and Rs 324.60 crore for fourth quarter ended March. In hotels, the annual loss has been Rs 50 lakh, although in fourth quarter there has been a slight profit at Rs 3.91 crore.

However, ITC has explained away the performance in other fast moving consumer goods by saying that this largely reflected start-up and business development costs, while the hotel performance has been largely the impact of gestation cost of newly opened hotels and the impact on international travel post 9/11.

In its most precious business segment cigarettes, there has been an 8 per cent decline in ITC's domestic sales, although industry volumes nationally have declined by 11 per cent due to high excise duty, state level taxes and contraband. Revenue in cigarettes at Rs 8020.92 crore contributed to 81.5 per cent of ITC's gross income.

Gross income at Rs 9982.44 crore in the financial year ended March 31, 2002, represented a 13.08 per cent rise against Rs 8827.11 crore the previous year. Net sales turnover at Rs 5059.23 crore indicated a rise of 20.22 per cent Rs 4208.12 crore in the previous year.

Other income declined by 1.46 per cent to Rs 142.35 crore in the financial ended March 2002 from Rs 144.47 crore the previous year. Net income, however, grew by 19.50 per cent to Rs 5201.58 crore in the year under review over Rs 4352.59 crore in the fiscal 2000-01.

Total expenditure increased by 25.41 per cent to 3155.96 crore in March 2002 over Rs 2516.44 crore. Stock-in-trade decreased to Rs 98.47 crore (Rs 20.31 crore), expenditure on raw materials jumped to Rs 1988.89 crore (Rs 1512.68 crore). Staff costs also increased to Rs 311.05 crore (Rs 274.43 crore) and other costs rose to Rs 954.49 crore (Rs 749.64 crore).

Gross profit rose by 13.70 per cent to Rs 1978.71 crore (Rs 1740.24 crore) after accounting for a lower interest outgo at Rs 66.91 crore (Rs 95.91 crore). While depreciation cost was Rs 198.45 crore (Rs 139.94 crore), profit before tax increased by 11.24 per cent to Rs 1780.26 crore (Rs 1600.30 crore). Tax outgo was Rs 590.94 crore in March 2002 compared to RS 594.04 crore in the previous year.

The company's paid up capital stood enhanced to Rs 247.51 crore (Rs 245.41 crore). The enhanced equity capital includes Rs 2.10 crore share capital suspense in respect of shares awaiting allotment to erstwhile ITC Bhadrachalam Paperboards Ltd shareholders consequent to its amalgamation, the company added.

Relentless focus on the efficiency of capital deployment contained the increase in net assets employed to a mere 7 per cent including the impact of amalgamation of the paperboards business and strategic capital outlays towards attaining international competitiveness, the company said.

Consequently, net cash flows from operating activities at Rs 1,770 crore represents an increase of 79 per cent. The cash flows helped the company to retire debts leading to further reduction in interest costs.

ITC stock price was up by 1.13 per cent to Rs 618 on the Bombay Stock Exchange. The stock touched an intra-day high of Rs 621.80 before closing at Rs 620.90 on the National Stock Exchange. Some 2,05,843 shares changed hands during the day on the stock exchanges.