Compared to the immediately preceding quarter, Indian Rayon has reported lower operating profits at Rs 51.77 crore as against Rs 8.78 crore for the three-month period ending March 1999. As the cement business of the company was demerged to Grasim Industries Ltd on September 1, 1998, the results are not comparable with the corresponding quarter of last year, the company said.

Production of viscose filament yarn (VFY) stood at 3168 mt reflecting a 10.61 per cent decrease, the company said in a statement here on Friday. Production was scaled down on account of availability of cheap polyester filament yarn (PFY), resulting in lower demand for VFY, it added.

The company's carbon black division, registered a seven percent increase in production over that of the last quarter of 1998-99. With its new plant, near Chennai, now fully operational, turnover has increased to Rs 56 crore as against Rs 52 crore in the quarter ending March 1999.

The insulator division recorded a turnover of Rs 34 crore as against Rs 52 crore in the previous quarter, however, sales volumes were maintained if compared to the corresponding quarter of last year, it said.

Indian Rayon's textile division posted a turnover of Rs 81 crore compared to Rs 85 crore in the quarter ended March 31, 1999. While the company has temporarily suspended the operations of its sea water magenesia plant, it was saddled with huge inventory build-up on account of the poor off-take caused by continued slump in the domestic steel industry and substantial dumping of fused magnesia from China among other countries. Indian Rayon was aggressively searching for a prospective buyer for its Sea Water Magnesia business, it added.

The book value of investments in fixed assets ofthe Sea Water Magnesia division stood at Rs 332 crore, while net current assets were valued at Rs 21 crore. The company has recently prepaid the debentures raised for this project, thereby lowering the high interest burden and has also reduced the recurring costs by cutting down overheads. During the quarter, the company reported exports of Rs 69 crore.