ITC Q4 adjusted net rises 36 per cent

Tobacco and hospitality major ITC has reported fourth quarter and full year results, which are in line with expectations. Despite a decline in operating margins, the company has maintained healthy volume growth.

For the quarter ended 31 March 2006, ITC has reported a 26.42 per cent decline in net profits to Rs567.89 crore from Rs771.75 crore during the previous year quarter. Total income increased 27.84 per cent to Rs2,859.08 crore from Rs2,236.43 crore for the previous year quarter.

Adjusted for exceptional items, net profits for the quarter increased 35.95 per cent. Other income increased 25.79 per cent to Rs74.62 crore from Rs59.32 crore.

Operating profits for the quarter increased 20.99 per cent over the previous year quarter. Operating margins as a percentage of net sales declined to 28.82 per cent from 30.46 per cent during the previous year quarter.

Operating margins were impacted by a steep 46.45 per cent spurt in input costs during the quarter as compared to the previous year quarter. The company managed to lower staff costs by a marginal 0.5 per cent while other expenses went up by 13.66 per cent. For the full year 2005-06, standalone net profits increased by 2 per cent to Rs2,235.35 crore from Rs2,191.4 crore for the previous year. Total standalone revenues increased 27.95 per cent to Rs10,076.61 crore from Rs7,875.26 crore.

The company incurred exceptional expenses of Rs45.02 crore during the year, mostly on account of compensation to contract manufacturers and suppliers after some excise exemptions were withdrawn. During the previous year, the company had booked exceptional income of Rs354.33 crore.

Adjusted for these extra-ordinary items, net profits for the year increased 24.13 per cent. Other income for the full year increased 21.32 per cent to Rs286.08 crore from Rs235.81 crore.

Operating profits for the full year increased 19.15 per cent over the previous year. Operating margins as a percentage of net sales declined to 33.99 per cent from 36.56 per cent for the previous year. Consolidated profits for the year 2005-06 increased marginally by 2.25 per cent to Rs2,295.38 crore from Rs2,245.42 crore. Consolidated revenues increased 27.91 per cent to Rs10,637.99 crore from Rs8,316.71 crore.