Nagarjuna Fertilisers and Chemicals Ltd (NFCL) has declared a loss for the quarter ended March, 2001.
This is the first time the company is reporting a loss since it started commercial production in August 1992.
The company posted a loss of Rs 4.58 crore on a turnover of Rs 282 crore for the January-March quarter compared with a profit of Rs 38 crore on a turnover of Rs 388.45 crore during the same quarter of the previous year. Interest burden rose to Rs 92 crore from Rs 73.30 crore.
"Re-assessment of retention price for the both the urea plants and lower offtake coupled with higher interest burden resulted in loss to the company," NFCL managing director K S Raju said.
However, for the 12 month period ended March 2001, the company posted a net profit of Rs 58.62 crore on a turnover of Rs 1,231 crore as against a net of Rs 113.50 crore on a turnover of Rs 1,435 crore in the previous year.
The board of directors today, while taking on record its financial results, decided to extend the accounting year by three months to June 30, 2001, in view of the large amount of subsidy claims yet to be settled by the Central government.
NFCL operates two urea plants with an annual capacity of ten lakh tonne at Kakinada in Andhra Pradesh. The real problems for the company started when it took up a 6 million tonne petroleum refinery project at Cuddalore in Tamil Nadu on an investment of Rs 3,480 crore.
NFCL has been compelled to invest Rs 500 crore as equity in the refinery project as it could not find a strategic equity partner as yet. This led to a cash-flow problem to NFCL.
The company recently appointed JM Morgan Stanley and Deloitte Haskins & Sells to suggest a financial and business restructuring plan.
