Orient Paper faces adverse Covid-19 impact on financials

Operations of the company were adversely impacted due to shutdown of plants following nationwide lockdown announced by the Government of India because of Covid-19 outbreak.

Aug 10, 2020 04:08 IST India Infoline News Service

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Orient Paper and Industries Limited informed the exchanges Monday that the company's revenue and profitability have been adversely impacted. However strict cost control measures are expected to minimize the impact going forward. No fresh equity capital was raised during this period. The company has adequate capital and financial resources to manage its affairs.

“We reckon that the current challenges are likely to last for some time. Therefore, our focus will be on a continuous rationalization of costs and managing our cash flows most prudently. In this respect, the company is well placed to face the impact of the pandemic with its relatively strong balance sheet. The company had only Rs3.57cr of long-term debt as on March 31, 2020, while operating in a capital-intensive business,” company said.

The Covid-19 pandemic and consequent lock down and other containment and precautionary measures have resulted in disruption of supply chain and sharp decline in demand in most of the World economics including India. Operations of the company were adversely impacted due to shutdown of plants following nationwide lockdown announced by the Government of India because of Covid-19 outbreak.

Though the company resumed production from April 17, 2020, things are far from normal due to sporadic local shutdowns in various parts of the country impacting both, demand as well as supply chain. Exports and domestic sales were both impacted due to restrictions on production from the beginning of the pandemic.

“With lower demand, our mills are operations at 50%-60% capacity with phased relaxations, we expect the demand for our products to improve gradually and supply chain bottlenecks to reduce. We believe that based on actions we have already taken and in hand, the company will gradually return to normalcy and growth path,” company said.

Orient Paper & Industries Ltd ended at Rs18.55, up Rs0.25 or 1.37% from its previous closing of Rs18.30 on the BSE.

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