Hindalco Q2 profit slides, sees costs weighing
MUMBAI (Reuters) - Hindalco Industries(HALC.NS) warned rising input costs may impact performance in coming quarters after higher costs and lower production volumes in its aluminium business resulted in a 29 percent fall in its quarterly profit from domestic operations.
The aluminium and copper producer, part of the diversified Aditya Birla Group, also warned it may face small delays in the timelines for its upcoming projects. Hindalco is in the midst of trebling aluminium capacity to 1.9 million tonnes by 2013 at a cost of about $5 billion.
"The general slowdown coupled with the stubbornly high cost of inputs may impact the business results in the near future," the company said in a statement.
It reported quarterly net profit of 3.6 billion rupees for its Indian operations, compared with net profit of 5.02 billion rupees a year earlier.
Analysts on average had expected profit of 3.67 billion rupees for the July-September quarter, according to a Reuters poll of brokerages.
Net sales fell about 2 percent to 62.2 billion rupees.
Hindalco's U.S.-based subsidiary, Novelis, which is the world's largest producer of rolled aluminium products, will detail its September quarter earnings later on Tuesday.
At 3:14 pm, Hindalco shares were trading nearly 2 percent lower at 112.30 rupees, after the results. The shares, valued by the market at $4.1 billion, are down 3 percent so far this year compared to a 21 percent rise in the Sensex.
Its aluminium business, which accounts for a third of domestic revenues but normally boasts higher margins, reported a 60 percent slump in profits from a year ago, due to operational disturbances at its two smelters, shortage of bauxite and higher fuel and material costs, the company said.
The lower margin copper segment, which accounts for two-thirds of the total revenue, saw profits rise 40 percent on better volumes and a weaker rupee during the quarter.
Non-ferrous metal prices have remained stagnant globally this year on demand uncertainties because of the euro zone debt crisis and softening Chinese demand.
Copper futures on the London Metal exchange were trading around $7,676 per tonne, nearly flat so far in 2012. Aluminium futures, at $1,913 a tonne, are down about 5 percent this year. (Reporting by Prashant Mehra; Editing by Muralikumar Anantharaman)
- Tweet this
- Share this
- Digg this
- Ukraine seeks to join NATO; defiant Putin compares Kiev to Nazis
- Comedian Joan Rivers remains in serious condition at N.Y. hospital
- UPDATE 4-Iceland says eruption over, lifts all airspace restrictions
- UPDATE 2-U.S. slaps more sanctions on Iranian banks, firms
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
India's economy grew by a faster-than-expected 5.7 percent in the three months through June, its fastest pace in two-and-a- half years, helped by a rebound in manufacturing and mining sectors, government data showed on Friday. Full Article
Exclusive: Reliance plans $13 billion projects including new refinery. Full Article
In race for bigger margins, drug makers willing to lose the India "advantage". Full Article