Kolkata, January 19th 2009.
During the quarter, Income from operations went up by around 80% to Rs. 434 crores as against Rs 242 crores in the quarter ended December 2007. However, in the face of global recession, the Net Profit after tax stood at Rs 13.26 crores as against Rs. 49.97 Crores in Dec’07 Whereas, in respect of Year to date (9 months) results, the same have shown a significant growth with income reporting nearly three fold jump at Rs.1308 crores as compared to Rs.493 crores during the same period in 2007 and profit after tax for Dec’08 doubled at Rs.210.41 crores as compared to Rs.105.34 crores for Dec’ 07.
Commenting on the results, Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director said,"Gujarat NRE Coke operates in an unique industry segment, where it neither has peers, nor is the industry and its dynamics easily understood. Suffice to say, the fortunes of the industry, which is closely interlinked with the commodity cycles of coke and steel, is hugely volatile. This volatility ensures that there always remain a natural entry barrier for small, marginal players on the one hand and on the other, provides the company with an unique opportunity to use the down turns to invest in capacities as per the company's long term vision and prepare the ground to reap the benefits of the inevitable upturn that follows. That is the reason why, at any given point of time, the figures do not reflect the complete picture of the company, as the actual benefits of the huge expansion and integration work that is in progress will be available in near future."
This is also the precise reason why the company's performance can never be compared on a quarterly basis as the figures bear no semblance of order in the short term. However, in the longer term, on a point to point basis, the picture that emerges, is tell tale.
He further went on to add that "five years back, our company had a total installed capacity of 0.2 million tonnes as compared to present 1 million tonnes, and was a stand alone coke producer without any stake in coal mines or any other sort of supply security. The company's decision to think ahead and acquire coking coal mines to secure supply of its raw material and the resultant potential therefrom is not reflected as the mines are currently in developmental stage and are producing one million tons of premium quality coking coal as opposed to a targeted 7 million tonnes expected in 3-4 years time. The fact that these mines contain more than 500 million tonnes of in situ resource of world’s best premium quality hard coking coal also does not find place in the current EPS/PE calculations.
High quality Hard coking coal is a resource that is globally in short supply. It is a commodity whose availability is limited and whose demand is projected to grow at an exponential rate. There is already a demand supply mismatch and the same is expected to become more pronounced in the years to come, and the prices more and more volatile. Under the circumstances, the fact that the company is the first and the only Indian company to own and operate coking coal mines in Australia with secured supplies for the future accords Gujarat NRE Coke a singular benefit which few other companies around the world can lay claim to. However, these facts cannot be reflected in the quarterly figures due to the factors detailed above and should be considered while going through the results.
Gujarat NRE Coke is the country’s largest independent producer of Low Ash Metallurgical Coke (LAMC) with a track record of regularly rewarding its Investors with dividends and bonus. The company’s present coke production capacity of 1.00 million tonne is being expanded to 1.25 million tonne by 31st March, 2009. Further, the Company has also declared plans to set up a Greenfield 1 million tonne coke plant in the Nellore District of Andhra Pradesh. And a further 1 million tonne coke plant in Gujarat besides adding another 0.25 million tonnes at Dharwad over next 3-5 years, thereby taking the total coke making capacity to at least 3.5 million tonnes.
Besides the company already has 87.5 MW of windpower operational in Gujarat and has recently announced plans to set up further 200 MW of wind power over next 3-5 years. The Company is already in the process of setting up 60 MW of waste heat recovery co gen power plants which are expected to be operational in 2010. The company further plans to set up 200 MW of Thermal Power plant and 120 MW of waste heat recovery power plants over next 3-5 years. The total power generation capacity would thus become 667.5 MW once these projects are complete.
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