Aditya Birla Group flagship company, Hindalco Industries, on Tuesday reported a 28.6% dip in standalone net profit for the fiscal 2012-13 second quarter, on account of lower dividend income from subsidiaries and weak prices of aluminium on the London Metal Exchange.
Net profit for the quarter stood at R359 crore against R503 crore in the same quarter last year. The profit was also affected by lower net sales. Net sales for the quarter fell marginally by 1.7% to R6,114.71 crore against R6,220.47 crore in the same quarter last year.
?Our focus on value-added products has mitigated some of the negative impact of the high raw material prices and weakness in the LME prices,? said D Bhattacharya, managing director of Hindalco Industries.
Aluminium prices on the LME have fallen $750 a tonne in the last 18 months. But value-added metal production aided Hindalco to have a operating margin of close to 9% compared to global standards of 3.9%. Out of Hindalco?s total production, 49% is value-added metal.
The company?s pressures in the aluminium business was also mitigated by a robust performance of the copper business.
The segment?s turnover was almost flat year-on-year at R4,066 crore. Copper segment?s earnings before interest and tax grew 41% y-o-y to R209 crore.
?Copper business gave a robust show and proved that after a planned shutdown, the copper business has settled down very well,? said Bhattacharya.
The company said that its greenfield projects, Mahan, Utkal Alumina plant and Aditya Smelter plant are on track and will be commissioned by the middle of 2013 calendar year.
Giving his outlook, Bhattacharya said that although uncertainties remain in the global economy, aluminium consumption growth should continue to beat the world GDP growth rate.
?About LME prices, I will be very surprised if prices fall further,? he said. ?Already 30% of the producers are running losses, so coupled with some shutdowns and increase in consumption, LME prices for aluminium should pick up.?
On Tuesday, Hindalco?s share closed 1.87% lower on the BSE at R112.55.
