BENGALURU (Reuters) – Indian aluminium maker and seller National Aluminium Co Ltd (NALCO) on Friday reported a 69% slump in quarterly profit on the back of lower demand and high costs.
The state-run company’s consolidated profit fell to 2.56 billion Indian rupees ($31 million) in the quarter ended Dec. 31 from 8.31 billion rupees a year ago.
High global coking coal prices have dented profits for many Indian companies during the quarter, while analysts had said soaring caustic soda prices too would weigh on the aluminium maker’s profits.
The cost of raw materials surged by 70.5% year-on-year basis, while the cost of power and fuel consumed rose 26%.
Revenue from operations slid by 12.8% to 32.9 bln rupees.
“Lower sales volume of alumina during the quarter, higher input costs coupled with global challenging business scenario and volatility has affected the profit margins,” the company said.
On Thursday, rival Hindalco Industries also reported a 63% drop in quarterly profit due to high costs and lower aluminium prices.
Benchmark London Metal Exchange aluminium has fallen off the record highs hit in early 2022, sliding over 15% so far into this year due to factors such as the Russia-Ukraine conflict, recessionary fears and China’s zero-COVID policy.
“With firming up of aluminium prices globally and
higher productions volumes, we are sure that it will certainly add to the profit margins in the coming quarters,” NALCO said.
($1 = 82.4780 Indian rupees)
(Reporting by Nallur Sethuraman and Yagnoseni Das in Bengaluru; Editing by Maju Samuel)