Adani Wilmar Q2 Results: Adani group firm posts net loss of ₹131 crore; revenue down 13% YoY; stock falls
- Adani Wilmar Q2 revenue from operations declined 13% to ₹12,267.15 crore from ₹14,150.03 crore, YoY, due to steep correction in the prices of edible oils. It recorded a volume growth of 11% YoY in Q2. H1FY24 volume growth stood at 18% YoY.
Adani Wilmar, the Adani group company, on Wednesday reported a net loss of ₹130.73 crore in the second quarter of FY24 as compared to a net profit of ₹48.76 crore in the same quarter last fiscal. The company posted a net loss of ₹78.92 crore in the quarter ended June 2023.
The company’s net loss in the September quarter included a one-time loss of ₹53.5 crore.
“Profitability was adversely impacted due to loss in the edible oil segment, which was partially offset by better margins in the Food & FMCG and industry essential segments. Edible Oil losses are primarily driven by divergent trends in the spot (physical) and future prices, resulting in hedging losses,” Adani Wilmar said in a release.
Revenue from operations in Q2FY24 declined 13% to ₹12,267.15 crore from ₹14,150.03 crore, YoY, due to steep correction in the prices of edible oils. It recorded a volume growth of 11% YoY in Q2. H1FY24 volume growth stood at 18% YoY.
“The robust growth was supported by gradual improvement in consumer demand, lower edible oil prices, execution in GTM and efficient supply chain. The branded sales in both edible oil and foods grew faster than the overall sales,” the company said.
On the operational front, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) during the quarter ended September 2023 decreased 43% to ₹144 crore from ₹254 crore, while EBITDA margin contracted to 1.2% from 1.8%, YoY.
“We continued the growth momentum across all the business categories, amidst the challenging environment in the edible oils segment. The company gained market share across most of the edible oil & food categories, given the immense focus on expanding our direct reach and rural town coverage,” said Angshu Mallick, MD & CEO, Adani Wilmar.
While the profitability in edible oils were impacted consecutively for the second quarter, we believe that the abnormality will soon reverse, he added.
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Edible Oil
The Edible Oil segment grew by 4% YoY on volumes in Q2FY24, dragged by lower volumes in B2B sales. However, the branded sales volumes grew by 12% YoY.
The segment’s revenue declined 19% YoY to ₹9,038 crore in Q2FY24, due to the fall in prices of edible oils.
“The quarter continued to remain challenging for the edible oil segment. While the quarter was less volatile as compared to previous quarters, the segment continued to witness divergent trends in the spot (physical prices) and future prices. The quarter also witnessed record imports by the industry, that anticipated an early festive demand,” Adani Wilmar said.
The prices of edible oils fell further by 3% to 6% during the quarter and continued to remain range-bound in the sub-$1,000 per ton levels, it added.
Food & FMCG Segment
The Food & FMCG segment revenues grew at 26% YoY, with an underlying volume growth of 19% YoY. During the quarter, this segment contributed 10% to the sales revenue and 18% to the sales volume.
The company envisages increasing the saliency of the foods business to ~30% of sales volume, in the coming years. The growth in foods business moderated to ~20% levels, due to the export curbs on rice. However, the domestic foods business grew by 50%+ YoY during the quarter, it said.
Going forward, given that the gap between spot & future prices has narrowed, Adani Wilmar expects the profitability of Edible Oils to come back to normal levels in terms of Gross Margin and EBITDA per ton. Food & FMCG and Industry Essentials are expected to continue its profitability momentum.
Adani Wilmar share price dropped over 2% after the announcement of Q2 results. At 1:00 pm, Adani Wilmar shares were trading 2.34% lower at ₹319.55 apiece on the BSE.
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Business NewsCompaniesCompany ResultsAdani Wilmar Q2 Results: Adani group firm posts net loss of ₹131 crore; revenue down 13% YoY; stock falls
First Published:1 Nov 2023, 01:04 PM IST
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