Ongoing recession and the slowdown in domestic demand have impacted performances of many established players in the textile industry. Accordingly, their fiscal figures have tumbled. To add to this, the 40% increase in the MSP (minimum support price) for cotton as announced by the government in October 2008 has added to adversity increasing the input costs, thereby impacting the segment's margins as well, especially for domestic cotton fabrics manufacturers.
However, according to financial results for the quarter ended December 31, 2008, as announced by Century Textiles & Industries Ltd, the Company has posted a net profit for the period of Rs 231.40 million for the quarter ended December 31, 2008 as compared to Rs 728.00 million for the quarter ended December 31, 2007. Total Income has increased from Rs 8568.70 million for the quarter ended December 31, 2007 to Rs 8945.10 million for the quarter ended December 31, 2008.
Mr. S. K. Somani, VP Finance, Century Textiles Ltd, speaking to Fibre2fashion team expressed his outlook on the 'whys & whats' behind the company's financial performance. The excerpts are;
F2F: This year third quarter netsales are up by aprox 4% to the same quarter last year. What all would you describe as determinants behind? Mr. Somani: It was because of some increase in sales volume and some increase in selling prices.
F2F: Which all Policies/Sops by govt were availed of? Mr. Somani: We have taken benefit of loan under TUFS scheme.
F2F: What is your order backlog? Mr. Somani: There is no order backlog.
F2F: How do you envisage upcoming fourth quarter results? Mr. Somani: Though it seems that operating margins will continue to remain under pressure for fourth quarter too, but still, we optimistically foresee that fourth quarter results would be comparatively better than this third quarter.
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