Friday, Welspun-Gujarat Stahl Rohren Ltd., the flagship company of the $3,000 million Welspun group and manufacturer of high-grade line pipes, reported a significant drop in its net profit for the third-quarter, hurt by one-time charge due to write down of inventories and foreign exchange provision.
The Bharuch-based company reported third-quarter net profit of Rs.45.31 crore or Rs.2.41 per share, compared with Rs.97.39 crore or Rs.5.31 per share in the third-quarter of 2007. Net profit and earnings per share for the quarter fell by 53% and 55% respectively.
The company said that results for the quarter was impacted by one-time charge of Rs.80.40 crore towards write down of inventories of Rs.38.50 crore to its net realizable value due to sharp reduction in raw material prices world-wide and foreign exchange provision of Rs.41.90 crore towards sharp fluctuation and volatility of foreign exchange rates.
The company's quarterly net revenue increased 40% to Rs.1,456.63 cores from Rs.1,038.75 crore in the prior year quarter.
The company started with an outstanding order book of Rs.9,000 crore and further added orders over Rs.1,000 crore in the last three months in the difficult business environment.
For the first nine months, Welspun-Gujarat's net profit declined 27% to Rs.181.76 crore from Rs.249.26 crore for the comparable period a year-ago. Net revenue grew 45% to Rs.4,046.47 crore from Rs.2,787.11 crores for the nine-month period ended December 2007.
As on December 31, 2008, the order book of the company stands at Rs.8,800 crore.
The company has enhanced its Spiral Pipe Production capacity by 150,000 MT at its Anjar facility.
The company stated that the construction of 300,000 tons HSAW pipe facility in Little Rock-US was completed and commenced trial production . The commercial operation is likely to be announced within a week.
The company added that it has commenced the commercial production at its HSAW project at Anjar, Gujarat.
The Vice Chairman and Managing Director, B.K. Goenka, said, "I take pride to mention that Welspun is effectively addressing various universal challenges with global capacities, conservative operational and financial policies and a strong order book from premium clients. The company is showing continued focus on Engineering Excellence and the ability to delight customers within India and across the globe."
At the BSE, Welspun-Gujarat closed Friday's trading at Rs.70.85, down by Rs.3.65 on a volume of 16.91 lakh shares. The company's scrip touched an intraday high of Rs.75.50 and an intraday low of Rs.69.25.
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