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Ballarpur Industries (BILT) (updated - 06 Oct 2009)
For the June ‘09 quarter, suffered from losses in its overseas operations and a moderation in paper prices due to the global economic meltdown. The consolidated profits stood 39% down at Rs 44.7 crore, while sales fell 8.7% to Rs 724 crore. BILT’s Malaysian plant and the pulp unit in Andhra Pradesh, which was recently restarted, reported losses.

At the operating level, the company did reasonably well with raw material cost showing no increase and employee cost recording a decline. As a result, earning before interest, depreciation, tax and amortisation (EBIDTA) for the quarter was down by only 2.6% to Rs 178 crore.

However, a sharp rise of 11% in interest and 42% in depreciation weighed heavily on net profits. Depreciation jumped mainly on account of commissioning of new capacities. Among the segments, paper, which accounts for more than 80% of the company’s revenues, registered a growth of 3.6%, whereas business stationery recorded a growth of 8%.

Despite the growth in these two segments, overall sales were down due to a sharp decline in its pulp segment, where sales fell by as much as 93.8%. The pulp production was also down by 57%. Despite the general weakness in economic conditions, the company enhanced its production capacities, which includes a new capacity of 1.90 lakh tpa at Bhigwan and 1.65 lakh tpa at the Ballarpur unit. The company also restarted operations at its pulp unit in Andhra Pradesh by end May ‘09. It primarily produces rayon grade pulp for the viscose staple fibre industry.

The company witnessed a challenging situation in the last few quarters due to a change in the economic scenario. However, thanks to the stable domestic demand for paper it reduced the losses from its overseas operations. Further, its core business segments, coated paper, copier paper and Hi bright paper, are expected to still grow at around 8 to 10%.
source - ET

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