Monnet Ispat and Energy reports 21.69 per cent growth in fourth quarter

NEW DELHI: Monnet Ispat and Energy reported a 21.69% growth in fourth quarter turnover, with sales of Rs 586.05 crore, compared to the same quarter the previous year. Net profits at Rs 83.09 crore were up 8.52% for the quarter, a tad better compared to the same period in FY11.

The sponge iron and power company, is in the process of putting up a 1.5mt steel plant in Raigarh. It is also setting up 1710 MW watts of power capacity in Angul, Odisha in two stages. The New Delhi based company said the prices of sponge iron and steel prices are firming up, however added that margins remain unchanged, in the face of an increase in raw materials prices globally. For the financial year 2012, MIEL's net profit grew 8.91 % to Rs 306.23 crore , as against Rs 281.8 crore during FY 2011. Turnover registered 22% growth ending at Rs 2063.55 crore. Operating profits at Rs 499.13 crore also improved 11.19% compared to the previous year.

Chairman and Managing Director, Manoj Jajodia told newspersons that he's worried about the eminent downward cycle of the international steel sector. "These steel capacities that have been planned, was on an assumption of a far higher consumption. If consumption does not take off soon, and infrastructure investments dont materialise, we will see surplus capacity. It will be a challenge to sell steel," said Mr Jajodia. MIEL's brownfield steel plant, marking its foray into flat steel with plates and HR Coil, is expected to expected to be ready with its bar mill by July 2012.

The company said that the first phase, of 1050 MW power plant in Angul, was progressing well and it has begun tying up debt for the phase two plan of 660MW. The company has Rs 2800crore in long term debt. Jajodia said debt to equity ratio is more comfortable and will improve further as the new plants to be set up get operational in two years.