PSUs tottering on mounting losses

Published - February 11, 2017 11:54 pm IST - THIRUVANANTHAPURAM:

Mounting losses and a lacklustre performance are threatening the existence of public sector undertakings in the State.

Out of the 42 units under the Department of Industries and Commerce spread over nine sectors, only 11 have recorded marginal profits. A review by the Restructuring and Internal Audit Board (RIAB) from April to September 2016 has pegged the turnover during the first half at ₹1,302 crore and the losses at ₹59.79 crore.

The turnover has increased compared to the previous year, but profitability has declined due to gross underperformance of the units in the development and infrastructure, electrical equipment, electronics, and engineering sectors.

Recession, low selling price of yarn, and negative contribution have deepened the gravity of the crisis in the textile sector. Demonetisation has also dealt a blow to the sector that prevails on cash and carry operations.

As per the review, 11 units registered a profit of ₹59.79 crore against a turnover of ₹783.21 crore.

Kerala Minerals and Metals Ltd tops the list of profitable units with ₹23.22 crore followed by Malabar Cements with ₹18.59 crore. Three units, including Titanium Products and Steel and Industrial Forgings Ltd, which were incurring losses during the previous year, turned around. Two others, Steel Industrials Kerala Ltd and Kerala Artisans Development Corporation, have reduced losses and registered nominal profit.

Travancore Cochin Chemicals has also considerably increased its profit. The report has proposed an expansion or a full capacity utilisation of the units that have turned around.

The overall net loss of 30 units has been pegged at ₹118.70 crore against a turnover of ₹519.31 crore during the review period. Their turnover and loss during the corresponding period the previous year were ₹634.91 crore and ₹85.19 crore respectively.

The textile sector accounts for 30.33% loss and the electrical sector 21.70%. The Kerala State Textiles Corporation is the highest loss-making unit, with ₹16.33 crore. The Central-State joint ventures also did not fare well. Commitments from the Central PSU partners have not been met as per the joint venture agreements. As many as eight units are on the brink of being referred to the BIFR.

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