The Hindu Business Line : Hindalco Q3 profit rises 11 pc on higher volumes

HINDALCO Industries Ltd has reported a 10.6 per cent increase in its net profit at Rs 196.1 crore for the third quarter ended December 2003 against Rs 177.3 crore in the year-ago period.

Higher volumes in both aluminium and copper business and a focus on value-added products helped the company to report good financial results.

Net sales moved up by 32.6 per cent to Rs 1,658.9 crore from Rs 1,251.4 crore in the year-ago period.

Aluminium business contributed Rs 761.2 crore to the turnover.

Though aluminium prices improved considerably during the third quarter as compared to the year-ago period, the appreciation of the rupee's value against the dollar and intense competition capped realisations. EBITDA (earnings before interest, tax, depreciation and amortisation) margins were at 37.6 per cent against 30.8 per cent in the corresponding quarter last year. This is on account of improved operating parameters from the brownfield expansion which also led to economies of scale.

Copper sales were Rs 900.8 crore, up by 23.4 per cent to Rs 729.9 crore. This is on account of higher volumes. But EBITDA margins fell from 20.2 per cent to 10.9 per cent due to low levels of TC/RC, a strong rupee, higher duty entitlement pass book premiums and an adverse change in geographic scope by which export volumes went up which return comparatively lower contribution.

Metal production rose by 35.8 per cent to 82,142 tonnes, redraw rods by 44 per cent to 15,087 tonnes, rolled products at 18,169 tonnes, extruded products fell by 4.9 per cent to 4,510 tonnes, foil at 4,664 tonnes and alumina moved up by 30.4 per cent to 1,61,487 tonnes.

Production of copper cathodes was higher by 3.7 per cent during the quarter to 50,301 tonnes.

The company is evaluating another low cost brownfield expansion at Dahej. "This will enable the company to fully leverage the infrastructure potential at Dahej while ensuring cost reduction and growth on going,'' the company said.

For the nine-month period, Hindalco reported an 8.7 per cent increase in net profit at Rs 616.7 crore from Rs 567.5 crore in the year-ago period. Net sales for this period moved up by 17.3 per cent to Rs 4,289.2 crore from Rs 3,655.2 crore.