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ICI suffered Rs 3.81 bn loss last year

RECORDER REPORT

KARACHI: ICI's losses in 1999 widened by 77 percent to Rs 3.810 billion as compared with Rs 2.144 billion of the previous year.

The net sales of the company recorded an increase of 47 percent to Rs 13.594 billion in 1999 from Rs 9.232 billion of 1998. The financial charges was at peak which converted the gross profit of the company into a huge loss. The financial charges in 1999 was at Rs 3.215 billion from Rs 1.723 billion of 1998.

The operating profit in the non-PTA portfolio of businesses for 1999 was Rs 1,112.3 million, which represent a 25 percent increase over 1998. This significant improvement was achieved despite a continuing economic recession and political uncertainty in the country during 1999 and was only possible as a result of improving manufacturing efficiencies and employee productivity.

It is estimated that about two-thirds of this improvement in profit has come directly as a result of these internal management actions.

The PTA business has completed its first full year's operation during which it was possible to concentrate on improving manufacturing efficiency and streamlining fixed costs on a consistent basis. As a result, the operating loss for the full year was restricted to a level lower than that for the six months operation 1998, despite the persistence of the cyclical downturn and prices reaching unprecedented lows in early 1999.

Efforts were made to reduce the company's financial charges for the full year despite which they remained high and together with a continuing PTA loss negated the strong improvements in operating performance, resulting in a loss before tax of Rs 3,736.2 million.

Looking forward to the year 2000, the regional environment for the PTA and polyester staple fibre businesses is positive and company is well poised to benefit from this market upturn with its competitive cost base and highly efficient operating practices.

The domestic market growth in soda ash and paints businesses, coupled with the above referred to turnaround in the polyester chain , should allow the company to achieve operating profitability and substantially improve its cash generation.