Hindalco net slumps 16%

A MIXED THIRD QUARTER FOR INDIA INC

Bearing the brunt of lower aluminium prices and falling refining margins in copper business, Hindalco Industries, a Aditya Birla Group-promoted company, has posted a 15.7 per cent drop in net profit for the quarter ended December 31, 2007.

Net profit for fell to Rs 542.7 crore as against Rs 643.9 crore in the corresponding quarter last financial year. Total income fell to Rs 4,646 crore from Rs 4,714.6 crore.

"During the quarter, the prices of aluminium ingot were down 20 per cent due to appreciation of the rupee. LME aluminium lower by 10 per cent, 41 per cent lower Tc/Rc in copper and soaring international crude prices have exerted considerable pressure on margins," a release from the company said.

Of the total revenues of Rs 4,531.7 crore, the aluminium business contributed Rs 1,729 crore.

Aluminum sales rose 12 per cent, along with higher proportion of value-added products.

In the copper business, revenues stood at Rs 2806.2 crore driven by higher sales and better product mix.

During April-December 2007, primary consumption of aluminium globally witnessed a growth of 10 per cent. US production levels have grown strongly but demand from the residential construction and transport markets continues to remain weak.

"Demand from western Europe has been relatively stronger due to firm transport and engineering markets. China is the strongest driver of demand as the metal rose 34.7 per cent in terms of price in this period, with demand from the power, transport and construction markets bolstering growth," said the company's release.

However, a stronger rupee will continue to put pressure on the profit margins," the release added.

Hindalco's shares closed 2 per cent lower at Rs 176.10 on the Bombay Stock Exchange.