UPDATE 1-Hindalco India Q2 profit slides, sees costs weighing

Tue Nov 6, 2012 3:41pm IST

Related Topics

Stocks

   

* Q2 net profit 3.6 bln rupees vs 3.67 bln forecast

* Says high input costs to impact results in near future

* Hindalco shares down nearly 2 pct in firm Mumbai market

MUMBAI, Nov 6 (Reuters) - India's Hindalco Industries 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 ($66 million) 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 (0944 GMT), 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 main stock index .

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.

FILED UNDER:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage