The Hindu Business Line : ITC net up 8.7% in Q3

Kolkata, Jan. 19 ITC Ltd has registered a marginal growth of 8.7 per cent in net profit at Rs 903 crore for the third quarter ended December 31, 2008, against Rs 803 crore during the corresponding period last year, according to a company press release.

“The decline in hotel revenues consequent to the economic slowdown and the terror strikes in Mumbai, the continuing impact of high commodity prices and store rentals, brand building costs of the new personal care portfolio and the significant investments in augmenting distribution infrastructure and systems combined to exert intense pressure on profitability during the quarter,” the release said.

However, higher growth in paperboard and packaging revenues, scale up of the stationery and personal care businesses and superior product mix in cigarettes boosted the company’s net sales, which grew by 11 per cent at Rs 3,858 crore, against Rs 3,458 crore.

The stationery business witnessed 78 per cent growth during the quarter driven by robust sales of notebooks. The paperboards and packaging business grew by 14 per cent. The profitability was affected due to the depreciation impact of new investments in the pulp and paper machine facilities.

The agri-business revenues registered de-growth of six per cent due to lower soya volumes and rationalisation of the agri-commodity portfolio, the release said.

The revenues and profits of ITC hotels division also declined 14 per cent and 24 per cent respectively during the quarter. Construction activity in respect of the super deluxe luxury hotel projects at Bangalore and Chennai were however progressing satisfactorily in line with the respective project plans, the release added.

The company witnessed a modest growth in its branded packaged foods business in the face of economic slowdown and its impact on urban demand in certain categories. The spillover inflationary impact of input commodities along with high fuel prices impacted the margins during the quarter, it was pointed out. The company thereby plans to focus on consolidating the portfolio in select high margin categories, improve market servicing and drive supply chain efficiencies.

Related Stories:
ITC net up 4%; new FMCG biz drives turnover
Lull temporary, says ITC Info

More Stories on : Financial Performance | Diversified | I T C Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page