India’s biggest aluminium producer, Hindalco Industries Ltd, said profit declined for the first time in two years because of lower metal prices and a fall in copper smelting fees.
Net income dropped to Rs543 crore ($138 million) in the quarter ended 31 December from Rs644 crore a year ago. The median estimate of five analysts surveyed by Bloomberg was for a profit of Rs500 crore. Sales fell 3% to Rs4,530 crore, the company said on Wednesday.
Hindalco and Alcoa Inc., the world’s third largest producer, suffered from a drop in average aluminium prices in the quarter. Indian smelters have also been hit by the 12% gain in the rupee against the dollar and lower smelting fees caused by a global shortage of mineral concentrates.
Shares of Hindalco fell 2% to close at Rs176.1 each on the Bombay Stock Exchange on Wednesday. The stock has lost 18% of its value this year, more than the 12.5% decline in India’s benchmark Sensex.
Hindalco raised aluminium output by 9% in the December quarter and copper by 12%, according to a note by Mumbai- based brokerage Motilal Oswal Securities Ltd.
The company has been forced to keep one of its copper smelter shut for more than a year as prevailing treatment and refining charges are not remunerative.