Despite facing severe cost escalations and restricted raw material availability, Hindalco on Thursday reported a 16 per cent increase in its net profit for the second quarter of 2011-12 ended September 30, 2011, at Rs.503 crore against Rs.434 crore in the year-ago period. Net sales grew by 7 per cent to Rs.6,272 crore from Rs.5,860 crore driven by higher volume and improved realisation despite lower sale of value-added products.
The operating profit grew 8 per cent to Rs.845 crore from Rs.780 crore with higher volume and realisation in aluminium business and better refining margins and by-product realisation in the copper business. The performance was impacted severely by cost escalations and constrained bauxite and coal availability, Hindalco Managing Director D. Bhattacharya said.
Aluminium revenues grew 16 per cent at Rs.2,213 crore (Rs.1,911 crore) as a result of higher volumes and better LME aluminium prices. Alumina production dipped 4 per cent due to constrained bauxite supply. Metal volume was up 16 per cent. In the copper business, revenues were Rs.4,062 crore (Rs.3,951 crore) on higher LME and by-product credits. Copper volumes fell on account of shutdown of a smelter up to mid-July.
In terms of brownfield project status, the Hirakud smelter expansion from 1.61 lakh tonnes to 2.13 lakh tonnes will be completed by early 2012 and the company is evaluating further expansion to 3.60 lakh tonnes. It is also evaluating expansion of Belgaum's special alumina capacity from 1.89 lakh tonnes to 3.10 lakh tonnes.
The company has cautioned that the second-half will be difficult due to global uncertainties, falling LME prices and persisting cost pressures.
