BENGALURU (Reuters) – India’s National Aluminium Company (NALCO) topped third-quarter profit estimates on Tuesday, helped by lower raw material and fuel costs.
Consolidated profit soared almost 84% to 4.71 billion Indian rupees ($56.7 million) for the quarter ended Dec. 31 from a year earlier, smashing analysts’ expectation of 2.72 billion rupees.
Prices of thermal coal, a key material used as fuel for metal firms, were down in the quarter, helping cut NALCO’s power and fuel costs down almost 23%.
This, coupled with a nearly 26% decline in raw material costs, led to the company’s total expenses dropping almost 9% to 27.3 billion rupees.
Aluminium is used in making a variety of products – from car bodies to electric cables and food wrapping foil – due to its light-weight and ability to be formed into sheets and wires.
Prices of the metal were down from a year earlier, while some metals’ manufacturing activity fell in the quarter, which analysts attributed to a seasonal slowdown.
As a result, NALCO’s mainstay, the aluminium segment, notched a 4% decline in revenue.
The company’s modest 4% total revenue growth to 33.47 billion rupees was on the back of 11.6% growth in its chemicals business.
Aluminium accounts for about 60% of the company’s total revenue, while chemicals comprises the rest.
Rival Hindalco missed third-quarter profit estimates earlier on Tuesday.
($1 = 83.0775 Indian rupees)
(Reporting by Hritam Mukherjee and Varun Vyas in Bengaluru; Editing by Subhranshu Sahu and Maju Samuel)
