Tuesday, July 21, 2009

Gujarat NRE Coke first quarter results show sharp rise in turnover and profits


Kolkata, July 2009 : Gujarat NRE Coke Limited, the largest independent producer of Low Ash Metallurgical Coke in the country, has achieved quantum rise in its turnover and profits in the first quarter of the current fiscal year. The Board at the meeting held on 18th July 2009 approved the unaudited financial results of the company for the first quarter ended 30th June 2009. The company posted total income of Rs 310.04 crores for the quarter ended 30th June 2009, as compared to Rs 214.58 crore in the previous quarter ended 31st March 2009, showing an increase of nearly 45%. Similarly the company posted a net profit of Rs 3.64 crore as against a loss of Rs 103.18 crore in the previous quarter, reflecting a turnaround in the performance of the company.

The results show that coke demand in India has been on a rise and GNCL has been able to perform better in terms of turnover as well as realization from sales. The quarterly performance of the company is an indicator of the things to come. In the past few years the company has made large investments in capacity expansion and integration. The company is ready to reap the fruits of these investments. The company’s expansion in Dharwad, Karnataka is nearing completion. This would provide the company extra leverage of enhanced capacity to meet the increasing demand of coke in India. Though the current recession had its effect in the consumption of coke in the global market, the domestic scenario has been improving, due to increased domestic consumption levels, which augurs well for merchant manufacturers of met coke in India. As the company’s Chairman and Managing Director, Arun Kumar Jagatramka says, ‘Demand for coke has been buoyant in India in the first half of 2009. Shortages of coking coal are adding to the pressure in the market. We plan to increase our capacity further by setting two Greenfield plants of 1 million tonne each in Andhra Pradesh and Gujarat to take advantage of this ever yawning gap of demand and supply of coke in India.’ Consistent and reliable supply of coking coal from Australian mines adds to the company’s advantage.

Our company operates in a unique industry segment, whose dynamics are not easily understood. The company operates in a highly volatile environment and our fortunes are closely linked with the commodity cycles of coke and steel’ explains Arun Kumar Jagatramka. In view of the highly volatile nature of the business, there is a natural entry barrier for small and marginal players. The company’s growth strategy envisions taking advantage of the cyclical downturns to invest in capacities, to ensure that it is ready to reap the benefits of the inevitable upturn that follows.



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