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Hindalco Profit Climbs 11% as Production, Prices Rise (Udpate2)
Aug 4, 2010 09:02CST
Source:SMM

MUMBAI, Aug. 4 -- Hindalco Industries Ltd., India's largest producer of aluminum, reported an 11 percent gain in first-quarter profit after metal prices and production rose.

Net income climbed to 5.34 billion rupees ($116 million) in the three months ended June 30 from 4.81 billion rupees a year earlier, the Mumbai-based company said today in a statement to the Bombay Stock Exchange. That beat the 4.94 billion rupee average of 19 analyst estimates compiled by Bloomberg. Sales rose 33 percent to 51.8 billion rupees.

Prices for the lightweight metal used in beverage cans, cars and planes averaged 39 percent higher in London during the quarter from a year earlier. The company said last month output at its Hirakud smelter in the eastern state of Orissa was hampered by heavy rain.

"The outlook for coming quarters would be impacted by a subdued financial market sentiment, uncertain commodity and financial markets and lower production at Hirakud," Hindalco said today in a separate statement.

Hindalco, also India's second-biggest copper producer, said in the statement lower copper refining fees, higher energy costs and a strengthening rupee dented profit margins in its copper business.

'Huge Negative'

The decline in copper refining fees, which fell to 1 cent a pound in the quarter from 17.5 cents in the fourth quarter of fiscal 2009 in the spot market is a "huge negative," Managing Director Debu Bhattacharya told reporters today in Mumbai. The fees are unlikely to improve "in the next couple of quarters," he said.

Hindalco yesterday raised aluminum prices by 7,500 rupees a ton, Chief Financial Officer Sunirmal Talukdar said at the press conference, without giving comparative numbers. Aluminum for three-month delivery on the London Metal Exchange rose 1.9 percent to $2,217.75 a ton yesterday, extending a 10 percent gain in July.

Hindalco shares rose 0.7 percent to 165.50 rupees at close of trading in Mumbai. The stock has risen 2.9 percent this year, compared with a 3.7 percent gain in the benchmark Sensitive Index of the Bombay Stock Exchange.


 

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