Hindalco net profit jumps more than four fold in Q1

Indian aluminium producer Hindalco, the Aditya Birla flagship company   reported the result of Q1 on August 12 and registered a more than four four-fold jump in standalone net profit to INR 294 crore from INR 61.10 crore in the same period of 2015. It was the company’s better operational performance which pulled through the quarter with such huge profit. 

The total standalone income of the company dropped by 11 per cent to INR 7,716,53 crore from INR 8,667 crore during the same period of 2015. Total expenses of the company declined to INR 6,703.82 crore from INR 7,993.05 crore after the implementation of a number of cost control measures. 

In their press release the company said that revenues were hit due to a "sharp decline in realisations", while the net profit rose by more than four-fold helped by "better operational performance". 

"The company delivered a robust operational performance in adverse macroeconomic conditions. Its operational performance was also supported by deflationary energy prices," the spokesperson added. 

In spite of the revenue fall, the YoY aluminium revenues were up by 8 per cent on the back of a strong volume growth.

The average LME prices for aluminium dropped by 11 per cent in Q1 2016 as against a year ago. The aluminium business was more affected because of a sharp decline in the local market premium, which dropped by about 5-0 per cent.

The company also blamed the cheap aluminium import to India for the revenue decline. 

However, the lower cost of raw materials and the energy inputs due to a weak rupee partially offset the effect of the drop in realisations."The high level of imports continue to impact domestic sale volumes. Hindalco continues to focus on operational excellence, higher value addition, customer centricity and cash conservation to tide over these issues," the press release added.

The company sees the uncertain global macro factors to continue posing several challenges in future.