ITC posts 20 percent rise in Q1 net profit


Kolkata : Tobacco and hospitality industries major ITC Ltd Friday reported a 20.2 percent rise in net profits for the first quarter of 2007-08 driven by higher cigarette prices and continuing growth in the consumer, hotels and agri-businesses.

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ITC's net profit rose to Rs.7.83 billion ($193 million) for the quarter ended June 30, from Rs.6.52 billion in the like period of the previous year.

The gross turnover of the year grew by 20.2 percent to Rs.195.05 billion while the net turnover was Rs.123.69 billion, the Kolkata-headquartered company's chairman Y.C. Deveswar told the 96th annual general meeting here.

A value-added tax of 12.5 percent imposed on cigarettes from April pushed up prices. Accordingly, ITC, whose 31.7-percent stake is owned by British American Tobacco Plc, raised cigarette prices by about 20 percent.

In the past years, ITC had diversified into products such as garments, greeting cards and incense to reduce its dependence on tobacco. It also entered areas like personal care, apparel, retail and snack food sectors.

The non-cigarette portfolio of ITC grew by 37.6 percent during the year and now accounts for 52.3 percent of the company's net turnover.

Pre-tax profit jumped 20.1 percent to Rs.39.27 billion while post-tax profit at Rs.27 billion, registered a growth of 20.8 percent.

Earnings per share for the year stands at Rs.7.19 while the cash flows from operations stood at Rs.34.02 billion during the year.

ITC shares, valued at $15.6 billion, gained 3 percent in the quarter, trailing a 12 percent rise in the main index and a 5 percent rise in the sector index.

"The ITC Group's contribution to foreign exchange earnings over the last 10 years amounted to nearly $2.8 billion, of which agri exports constituted nearly 65 percent," Deveswar said.

"Earnings from agri exports is an indicator of the company's contribution to the rural economy by effectively linking small farmers with international markets,"