Monnet Q2 profit up 2 per cent at Rs 65.60 cr despite cost pressure

NEW DELHI: Domestic steel-maker Monnet Ispat on Thursday reported a 2 per cent rise in net profit in the second quarter to Rs 65.60 crore vis-a-vis the year-ago period, even as high input costs took a toll on its bottomline.

"(The net profit declined) due to maintenance shutdowns and an increase in iron ore prices," Monnet Group vice- cairman and managing director Sandeep Jajodia said in a statement in New Delhi.

The company had posted a net profit of Rs 64.21 crore for the second quarter of the previous fiscal.

"... Above all, low realisation on account of power sales (was another reason)," Jajodia said, adding that lower production of sponge iron and power also hit the bottomline.

The company registered net sales of Rs 360.65 crore in the reporting quarter as against Rs 313.98 crore in the corresponding period of the previous year.

Monnet Ispat is in the process of establishing facilities to produce 1.8 million tonnes of steel per annum. At present, it has an sponge iron manufacturing capacity of 1 million tonnes per annum.

"Going forward, once these expanded capacities start commissioning, it will help the company generate higher revenues and profitability, thereby maximising stakeholders' wealth," Jajodia added. The company will commission a 80-MW captive power plant by the end of FY'11.

Separately, its subsidiary, Monnet Power, is working to set up a 1,050-MW merchant power plant in Orissa.

On the steel price and demand outlook, Jajodia said, "Sponge iron prices are likely to rise in coming months, due to demand for long steel from infrastructure companies."