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Buoyed by higher prices on the London Metal Exchange, Hindalco Industries posted a 21 per cent rise in net profit at Rs 644 crore for the quarter ended June 30, 2011, against Rs 534 crore logged in the same period last year.
The adverse impact of strong inflationary pressure largely on energy products and rupee appreciation was mitigated by improved operating efficiencies. Higher value added by-product credit, besides treatment charges and refining charges in copper business, helped sustain performance, said Mr D. Bhattacharya, Managing Director, Hindalco.
Net sales rose 16 per cent to Rs 6,031 crore from Rs 5,178 crore.
EBITDA rose to Rs 1,045 crore, despite steep input cost. Better realisation, higher other income and improved efficiencies fuelled the rise, he said.
Hindalco said the joint venture agreement with Almex Inc, USA, in relation to subsidiary Hindalco-Almex Aerospace Ltd (HAAL), had been terminated from August 10 and the company had acquired 8,011,000 of the 13,011,000 equity shares held by Almex in HAAL.
Hindalco's US subsidiary, Novelis, this week reported a 24 per cent rise in net profit at $62 million and a 23 per cent increase in sales at$ 3.1 billion for the first quarter.
Following the deepening of sovereign debt crisis in Europe and downgrade of US sovereign rating recently, the macro-economic risks have accentuated. Setting of risk aversion into the financial markets can potentially have an adverse impact on investment flows into commodities, and on prices of aluminium and copper on the LME.
The company said that the environment in both the businesses had become very challenging due to volatility in the LME, spiralling energy and other costs and non-availability of coal. Regulatory uncertainty compounded the concern.
However, the long-term prospects of aluminium and copper consumption in India and the world augur well for the company. Capacity expansion under implementation would enable Hindalco to achieve its vision of being a global premium metal major, he added.
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