The sharp rise in aluminium and copper prices helped Aditya Birla group company Hindalco Industries more than double its net profit to Rs 664 crore (Rs 269 crore) in the fourth quarter ended March 31, 2010.
Sales jumped 43 per cent to Rs 5,404 crore (Rs 3,772 crore). On a sequential basis, the fourth quarter sales were up two per cent while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 12 per cent.
Mr Debu Bhattacharya, Managing Director, Hindalco, said the global economic recovery spurred the demand for metals with many automobile companies replacing steel with aluminium to reduce the weight of their end products. The improvement in demand resulted in higher aluminium prices on the LME.
“Our profitability improved with higher production due to debottlenecking and asset sweating, besides better product mix,” he added. The aluminium business contributed Rs 2,045 crore with an EBIT of Rs 614 crore while copper chipped in with revenue of Rs 3,361 crore and EBIT of Rs 127 crore.
Whole-year profit
For the fiscal, the company's net profit was down 14 per cent at Rs 1,916 crore (Rs 2,230 crore) mainly due to depressed demand for metals in the second and third quarter. Sales were up seven per cent at Rs 19,536 crore (Rs 18,220 crore). Besides, lower aluminium prices on LME eroded Rs 750 crore of revenue last fiscal while high coal cost shaved off Rs 100 crore. Besides, lower by-product credit in terms of sulphuric acid realisation and lower fertiliser subsidy also impacted annual performance, the company said.
“We expect the cost pressure to continue this fiscal with higher input cost and constraint in passing on incremental cost to end customers. Our experience last year would help us tide over pressure on our profits,” said Mr Bhattacharya.
The Hindalco scrip was down three per cent at Rs 170 on the BSE on Tuesday.
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