Gujarat NRE Coke Ltd announces pay-out to shareholders

Gujarat NRE Coke Ltd has announced that the Board of Directors of the Company at its meeting held on June 02, 2007, has mooted a 80 percent pay-out to shareholders. This huge pay-out, uncharacteristic of manufacturing entities and seen mostly in the service sector, has been justified on the very strong cash flow position of the Company in the current quarter. This strength emanates from the very healthy price realisation that the Company is getting currently.

The Company, largest producer of low ash metallurgical coke in the country, is today flying the good times. With China dictated price of the commodity steadily increasing since the last quarter of 2006, the Company's realisations have gone up substantially without a corresponding increase in the input costs. Being a long term player, and having its freight contracts in place, the Company has also benefited from the hike in the spot shipping prices. This added to the continuously rising demand for the Company's product in India, the future looks rosy, to put things mildly. With 100% import based raw materials, the Company also benefits from the Rupee at a 9 year high against the US Dollar.

Says Arun Kumar Jagatramka, Vice Chairman and Managing Director "Our philosophy is that of sharing. We believe in dedicated hard work and in sharing the fruits at our toil with our shareholders. This 15 percent dividend too, is part of the same philosophy that dictates that the stake holders in the Company get the benefit of the fortune that is now crowning the Company's performance. The bottom-lines are healthy. The estimated cash flow too, is very impressive. Naturally, I feel that its time the Shareholders raise the toast."

This high pay-out comes after many such shareholder friendly moves by the Company. Steady dividends, a plethora of Bonus issues and a continuous effort on part of the management to ensure that good performance of the Company is reflected and crystallised into shareholder benefits have been characteristic of the Company. The original shareholders, investing in 100 shares in the public is of the Company, for example, are today holders of 18.9 shares. The original investment of Rs 1000, being valued at Rs 1.13 lakhs today in the market, without considering dividend payout. Similarly, this pay-out of 80% will actually mean a receipt of 283% dividend to the original shareholder - figures that are worthy of the hard work that has gone into achieving them. Suffice to say, this outflow in the absolute quantum is in effect higher than the outflow in the earlier comparable period.

Source : Equity Bulls

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