Ballarpur Industries, one of the largest integrated paper companies in Asia, has reported better than expected results for the fourth quarter and full year ended June 2006. The company managed to improve its operating margins through better cost control.

For the fourth quarter ended 30 June, 2006, Ballarpur has reported a 67.73 per cent rise in standalone net profits to Rs 67.88 crore from Rs 40.47 crore for the same quarter of previous year. Standalone net revenues have increased 11.15 per cent to Rs 524.98 crore from Rs 472.34 crore.

The company has accounted an income of Rs 12.4 crore from the sale of its power and real estate divisions during the quarter. Adjusted for this one-time income, the bottom line has increased 37.09 per cent over the same period of last year.

Operating profits (EBITDA), excluding other income, has increased 14.93 per cent for the quarter. Operating margins as a percentage of net sales improved 80 basis points to 24.28 per cent from 23.48 per cent during the previous year quarter.

The improvement in operating margins was achieved through a marginal reduction in staff and other operating costs and lower growth in input costs. Material and other input costs for the quarter increased 8.62 per cent over the previous year. Power, water and fuel expenses went up 30.66 per cent.

Staff costs declined marginally by 3.61 per cent while other operating expenses were lower by 2.49 per cent.

21.14 per cent fall in interest costs helped improve bottom line growth considerably. Depreciation charges went up by a modest 6.98 per cent while tax provisions increased 38.74 per cent.

Other income for the quarter increased marginally by 4.2 per cent to Rs 4.71 crore from Rs 4.52 crore for the previous year quarter.

Full year standalone net profits at Rs 212 crore were 26.12 per cent higher than the previous year figure of Rs 168.09 crore. Adjusted for one-time income, growth in net profits was 18.75 per cent. Standalone net sales revenues increased 4.42 per cent to Rs 1,869.87 crore from Rs 1,790.64 crore.

Standalone operating profits, adjusted for other income, for the full year increased by a modest 7.66 per cent. Operating margins as a percentage of net sales improved to 25.93 per cent from 25.15 per cent for the previous year.

For the full year 2005-06, ended 30 June, 2006, BILT reported a consolidated net profit of Rs 214.17 crore – an increase of 26.82 per cent over Rs 168.88 crore reported for the previous year. Consolidated full year revenues were higher by 6.62 per cent at Rs 1,919.68 crore as compared to Rs 1,800.42 crore for the previous year.

Recently, BILT had acquired a majority stake in a Malaysian paper company with a large forest concession for a total consideration of $261 million. The acquisition will secure the supplies of paper pulp for the company's requirements.