Tuesday, February 17, 2009

PSUs cough up record interim dividends

Despite economic slowdown and weak results this fiscal.

Major payouts
NTPC Ltd forked out Rs 2,308.73 crore for 2008-09
SAIL handed over a crisp cheque of Rs 460.81 crore
ONGC board approved 180% interim dividend

Anil Sasi Richa Mishra Anil Sasi Richa Mishra
New Delhi, Feb. 14
A slowdown may well be in the air, but the interim dividends being forked out by the ‘navratna’ public sector undertakings (PSUs) seem oblivious to the worsening economic outlook.

State-owned firms, led by the blue-chip companies in the power and oil sectors, have announced all-time high interim dividends, despite the financial performance so far this fiscal being less than cheerful in most cases.

The biggest beneficiary in all of these PSU dole-outs is the largest shareholder in all of these companies, namely the Government of India.

Leading the charge, power major NTPC Ltd, forked out its highest-ever interim dividend of Rs 2,308.73 crore for 2008-09, of which Rs 2,066.30 crore works out as the Centre’s share.
The electricity generator had reported only a marginal increase of around Rs 13 crore (0.22 per cent) in net profit for the nine-month period of this fiscal.

Steel Authority of India (SAIL) handed over a crisp cheque of Rs 460.81 crore to the Government as the interim dividend for the fiscal, despite reeling under rising input costs and waning demand.

SAIL’s net profit was down 9.1 per cent for the first nine months of this fiscal, compared with the corresponding period last financial year, while the third quarter net nosedived 56 per cent.
Upstream oil PSUs also continued with high dividend payouts despite their bottomlines coming under strain.

The ONGC board approved an interim dividend of 180 per cent for 2008-09, even as its nine month net profit slipped by 1 per cent and the third quarter net fell 43 per cent.
GAIL (India) Ltd announced a 40 per cent dividend for the fiscal just after the third quarter results, which were down from Rs 651 crore to Rs 253 crore, even though the nine-month net was up 16 per cent.

However, the oil marketing companies such as IOC, BPCL and HPCL, which have taken a major hit on their profits, have desisted from announcing any payouts this fiscal.
“There has been an informal directive from the Finance Ministry to administrative ministries governing profitable public-sector companies, especially in the power and petroleum sectors, to pay interim dividends.

“The fiscal giveaways in the stimulus package have resulted in a big spurt in Government spending, and there is pressure on PSUs to maintain last year’s dividend pay-out levels despite the downturn,” a Power Ministry official said.


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