Monnet Ispat & Energy has reported a net profit of INR 61 crore for the Q1 of 2009-10 as compared to INR 70.32 crore in the previous corresponding period. The company’s revenues dipped 6% to INR 356.15 crore during Q1 of 2009-10 against INR 378.81 crore achieved in the first quarter of 2008-2009.

The company has reported a jump in the operating margins to 31% in the first quarter of 2009-10 from 28% in the previous corresponding quarter. The company’s operating margins saw an improvement on a sequential basis from 28% to 31%.

Monnet Ispat said that however net profits have marginally come down from about 19% to 18% on account of higher element of interest and depreciation during the quarter ended June 30th 2009. In particular a higher interest burden of INR 19.74 crore during Q1 of 2009-10 against INR 12.45 crore in the previous corresponding period impacted the company’s profitability during the quarter under review.

Monnet Ispat said that the drop in revenues was mainly on account of the base effect of prices of sponge iron and steel in the last year. The prices of sponge iron and steel are down by about 50% in the quarter relative to the corresponding quarter.

It said that the sponge iron industry is passing through challenging times with the pressure on prices for the last two months and not getting compensated by iron ore prices. The margins in the industry are under pressure. The availability of iron ore at competitive prices is also hurting the industry badly.

(Sourced from Economic Times)