Low sales dent BOC profits

Leading gas producer BOC India has posted a net profit of Rs 3.13 crore in the first quarter ended June 30, 2007, a decline of 89 per cent from the same period last year. The drop was because of lower sales and higher cost of interest.

The company clocked a turnover of Rs 106.83 crore, down 10 per cent. E R Raj Narayanan, managing director, said the gas business was adversely impacted due to a 23-day planned shutdown at the 1,290 tonnes per day plant in Jamshedpur, which accounts for around 50 per cent of the company's merchant sales.

Besides, lower third-party billings of the project engineering segment contributed to the lower turnover.

Interest cost increased from Rs 1.07 crore to Rs 2.82 crore during the quarter. The company attributed the increase to hardening of interest rates and higher short-term borrowings availed of by the company to plug cash flow mismatches.

However, the BOC stock today surged 4.52 per cent to Rs 136.50 on the Bombay Stock Exchange (BSE) on a day when the Sensex rose 290 points.

Narayanan said the Jamshedpur plant was back in line and the coming quarter's performance would be much better.

The company is also planning a merchant plant in the northern part of the country. Investments are likely to be in the form of external commercial borrowings, which would be finalised over the next couple of weeks.