Financial Daily from THE HINDU group of publications
Tuesday, Apr 27, 2004
Financial Daily from THE HINDU group of publications Tuesday, Apr 27, 2004 |
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Financial Performance Corporate Results - Aluminium Hindalco posts 44% growth in net profit Our Bureau
Mumbai , April 26 HINDALCO Industries Ltd ended 2003-04 on a robust note with a 44 per cent growth in net profit and 24 per cent increase in topline amid concerns about the stagnating demand for copper. The non-ferrous metals major reported a Rs 838.9-crore profit after tax compared to Rs 582.1 crore the previous year. Net sales moved up to Rs 6,190.0 crore during 2003-04 from Rs 4,985.6 crore . Higher volumes and improved realisations contributed to the topline growth on the back of improving product mix and a higher value addition. Aluminium margins improved but low profitability in copper proved a drag on Hindalco's numbers, said Mr Debu Bhattacharya, Managing Director of the company. Profitability in copper was affected due to three factors - weak treatment charges/refining charges; appreciating rupee and tariff reductions. Besides, demand for copper from the jelly-filled telecom cable sector completely dried up as demand for wireless and optical fibre cable picked up, he said. The board has recommended a dividend of Rs 16.50 per equity share taking the total outgo on account of dividend payments to Rs 172 crore. Hindalco has planned a brown-field expansion to increase copper smelter capacity from 250,000 tonnes to 500,000 tonnes. This would be completed in two years at a cost of Rs 1,200 crore, Mr Bhattacharya said. He said the company foresaw the demand decline in copper and therefore invested in mines, focussed on exports and now planned to expand.However, the gap between supply and demand in copper is increasing year-on-year. By 2007, the total deficit will be three million tonnes. On the other hand, aluminium demand is expected to remain firm in 2004 with an anticipated growth of 7.4 per cent. In 2003, Chinese demand increased by 26 per cent. Japanese demand is also on its way up and stocks are declining. Hindalco, in its consolidated avatar, has crossed the Rs-1,000 crore mark in profits.
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