Nalco's FY20 pre-tax profit tanks 93% to Rs 226 cr as alumina prices sag

Intermittent disruptions in coal supply had forced Nalco to buy costlier power from Odisha grid which had a telling impact on its top line and profitability

National Aluminium Company (Nalco)’s net profit for FY20 nosedived 92 per cent to Rs 138.23 crore as against Rs 1,732.4 crore, a record profit that the navratna company logged in 2018-19. The central PSU’s profit before tax for the year ended March 31, 2020 stood at Rs 226.24 crore, recording a steep fall of 91.74 per cent vis-à-vis Rs 2,739.92 crore in FY19.

Sagging international alumina prices and intermittent disruptions in coal supplies had forced Nalco to buy costlier power from the Odisha grid which had a telling impact on its topline and profitability. Nalco posted back-to-back and rare quarterly losses in Q2 and Q3 after a decent show in Q1 of last fiscal.

During the last fiscal, Nalco’s net turnover shrunk by Rs 2900 crore to Rs 8426 crore. The aluminium producer achieved an export turnover of Rs 3511 crore.

The only saving grace for the state owned aluminium producer was its Q4 or March quarter performance. Nalco managed to record Rs 102.76 crore net profit during this period, surmounting business headwinds like softening aluminium prices on London Metal Exchange (LME) and a virulent Covid-19 pandemic.

“We are optimistic that in the long run with our focus on increasing the production in mining and refining segments, opening up of the new coal blocks, backward integration in supply of key raw materials like caustic soda, we shall be able to tide over present economic crisis”, said Sridhar Patra, chairman & managing director, Nalco.

Nalco achieved significant growth in production and sales during 2019-20. Bauxite production of 7.32 million tonne (mt) in mines and 2.16 mt of alumina hydrate in alumina refinery, have been the highest-ever since company’s inception. Both mines & refinery complex of Nalco have been performing beyond their installed capacities. The company also produced 0.41 mt of aluminium metal in FY20.