Nalco profits slump on lower aluminium prices

New Delhi, June 3 National Aluminium Company Ltd. (Nalco), the country’s second largest aluminium producer, posted an 81 per cent drop in its fourth quarter net profit on lower aluminium prices. The state-owned firm, which contributed about 27 per cent of the country’s total aluminium production during the fiscal ended March 31, 2009, reported a net profit of Rs 83 crore for the January-March quarter last fiscal against Rs 447 crore in the year ago period. Sales decreased to Rs 1,157 crore from Rs 1,287 crore, Nalco said in a filing to the Bombay Stock Exchange. During the quarter under review, employee costs more than doubled to Rs 277.44 crore (Rs 106.82 crore) following the implementation of the Pay Commission recommendations. Raw material and power costs also surged. Aluminium prices came under pressure on weak demand from the automobiles, aviation and packaging sectors. Nalco produces 3,60,000 tonnes of aluminium annually and sells at prices linked to the London Metal Exchange. For the year ended March 31, the company posted a net profit of Rs 1,272 crore, down 22.01 per cent from Rs 1,632 crore last year. Sales rose to Rs 5,531 crore from Rs 5,474 crore. Global aluminium producers cut combined daily production to 93,700 tonnes in March from 1,08,900 tonnes in September 208, according to the London-based International Aluminium Institute. Aluminium prices have more than halved from their peak last July. Aluminium consumption worldwide is expected to contract 9 per cent in 2009 and prices are likely to remain depressed in the near term, HSBC Global Research said in a recent note. Shares of Nalco closed at Rs 356.80, up 2.46 per cent on the BSE. The earnings were announced after the markets closed.