State-run trading firm MMTC, which is a disinvestment candidate for the current fiscal, today reported a sharp fall of 88% in net profit for the first quarter of 2011-12.
The net profit for the first quarter of this fiscal fell to Rs 6.47 crore, from Rs 55.23 crore in April-June 2010-11, due to ban on iron ore exports, MMTC said in a filing to the Bombay Stock Exchange (BSE).
The fall in profit came despite a huge jump in business turnover, which rose by 69% to Rs 20,421.27 crore in the period under review.
"The reason for decline in net profit is mainly ban on iron ore exports [as it has high contribution in the company's profit]," a senior company official said.
Total expenditure has increased by 70% to Rs 20,430.25 crore during April-June this fiscal.
The expenses have seen an all round jump, including the employee cost which has gone up to Rs 54.82 crore for the quarter against Rs 37.85 crore in the same period last fiscal.
More From This Section
The board has recommended a dividend of 25%. However, this relates to the previous fiscal year ended March 2011.
The earning per share (not annualised) came down from Rs 11.05 to Rs 0.06, which could be a dampener for the company in which government wanted to disinvest 10% of about 99% holding this year.
The profit is expected to hit in the second quarter also, the official added.
Shares of MMTC today closed at Rs 876.35 on the BSE, down 0.71% from its previous close.