The Calcutta head quartered producer of Low Ash Metallurgical Coke (LAMC), Gujarat NRE Coke is looking forward in anticipation to the new financial year 2007-08. The optimism stems from the fact that Chinese coke prices have been moving up sharply in the last few months after languishing for more than a year. Such price rises have a natural and direct effect on the bottom line of Gujarat NRE Coke, which happens to be the largest producer of the commodity in the non captive sector in the country. This time too, the effect is expected to be very positive on the company's performance, which has been bolstered by various other facts in the immediate past.
The impact of the Central Governments Budget of 2007, which did away with customs duty on imported coking coal too will benefit the company in the coming years. This coupled with the steady forays on the production front - Gujarat NRE Coke, the only Indian company to be owning and operating coal mines in Australia has consolidated its supply sources having streamlined the production process of its 1st Coal Mine in NSW, Australia, NRE No.1. Thus, with a steady supply of excellent grade raw material providing the company with the twin edges of steady supply and hedge against global price fluctuations, the company is all set to scale up and bask in the glories as the prices firm up.
The net import demand of equivalent coal, which stood at 21 million tonnes in 2004-5, is currently pegged at 27 million tonnes and is expected to zoom up to 75 million tonnes by the year 2011-12 as the energy hungry nation will seek to convert its Vision 2020 to a reality. This will mean a hundred plus million tonnes of steel by the year 2020 and with the blast furnace route of steel making still being the most favoured, the demand for Gujarat NRE Coke products is expected to go only one way - up. In keeping with this projected demand supply imbalance, the company has drawn up extended plans which include among others :
* Doubling of coke making capacities at Dharwad in Karnataka.
* Setting up of Coal Washery in Bachau, Gujarat.
* Setting up of power generation facility from waste heat in its plants
* Consolidating the Australian and New Zealand operations spread over mining and resource prospecting
Gujarat NRE Coke today, is a beehive of activities and more and more investors are flocking to the company, the only listed company in the segment. The shareholders interest is not unwarranted, considering the fact that Gujarat NRE is known for its investor friendly ways and has in the past among many deeds given 4 consecutive bonuses and steady dividends. The promoters of the company too are holding firm having acquired a further 3.76 % of the stock in the last financial year through the creeping acquisition mode
Financial Performance
Quarter on Quarter, Gujarat NRE Coke has posted much improved results in the current quarter ending March 31st 2007. Net Sales of the company, which stood at Rs. 83.95 crores in the quarter ended 31st March 2006, has shot up to Rs. 179.01 crores, a growth of 113 percent. This upswing in the sales has translated to a whooping 1360 percent jump in the Profit Before Tax of the company to Rs. 60.45 crores - up from Rs. 4.14 crores in the preceding quarter.
This all pervasive and all round improvement in the performance of the company has had a direct positive impact on the bottomline with the Earning per Share standing at Rs. 2.09 in the current quarter, as opposed to Rs. 0.56 (up 173 percent from the previous quarter). The Book value of the company too has gone up substantially to Rs. 23.91 per share (Rs. 21.77)
Coal Mines
The long term production plans at the coal mines of the company in Australia is also in place. The company's first mine, NRE No 1 in NSW, with the present annual capacity of about one million tonnes excellent quality coal is now in the process of being scaled up and the company proposes to produce and ship a total of 5.5 million tonnes of coal per annum from the Australian mines in 4 years time.
For More Information visit the company website :
www.gujaratnre.com |
