Hindalco net surges 92% on strong metal prices

BS 200 SCORECARD

Hindalco Industries, the country's top aluminium and copper producer, has reported 92 per cent rise in net profit in the quarter ended December 2006 at Rs 643.9 crore compared with Rs 336.2 crore in the year-ago period.

The performance, which was in line with the expectation of the Street, was on the back of strong aluminium prices, a turnaround in its copper business, an improved product mix on account of higher sales of value added products and focus on speciality alumina.

The flagship company of the Aditya Birla group saw its net sales rise 62 per cent in the third quarter to Rs 4,656.2 crore from the previous corresponding period's Rs 2872.7 crore. Profit before tax went up 106 per cent to Rs 895.5 crore.

The company said it expected aluminium demand in China to remain a price driver in the final quarter of fiscal 2006/7, despite a slowdown in US consumption. 
 

Rs crore	Quarter ended Dec		% chg
	2005	2006
Net sales	2872.70	4656.20	62.10
Total income	43.30	58.40	34.90
Total expenses	2289.70	3610.90	57.70
Gross profit	563.50	1033.90	83.50
Net profit	336.20	643.90	91.50
EPS (Rs)	3.00	6.00	100.00

The company, which earned 58 percent of its revenue in the last financial year from aluminium, said aluminium revenue in the December quarter rose 15 per cent from a year earlier owing to higher sales of value-added products and a focus on speciality alumina.

Copper prices "continued to come down to more realistic levels" on a fall in Chinese demand, the company said in a media statement. It added that treatment and refining margins could come under pressure in the coming year due to tight supply of copper concentrate.

Value-added production rose to 67 percent of total primary metal production during the quarter from 59 percent a year earlier.

The copper division, which had made a loss in the year-ago quarter after a blast at a smelter slashed production, swung to profit as revenue grew 119 percent.

The company's business from aluminium rose 15 per cent from Rs 1563.4 crore to Rs 1795.8 crore. It generated business of Rs 2862.2 crore, 119 per cent rise over Rs 1308.4 crore.

Both alumina and aluminium continued to operate at high utilisation levels and above their rated capacities. Rolled products output strengthened owing to better performance from the rolling plants as also the acquisition of the rolling mill at Mouda.

Extrusion output showed significant improvement due to total capacity utilisation of the new Extrusions press operating at Renukoot since April '06.

Value-added production as a percent of total primary metal production was at 67 per cent in the third quarter of the current year vis-a-vis 59 per cent in the corresponding period of the last year.