India’s National Aluminium Co Ltd (NALCO) struggled in the quarter ending on December 31, reporting a 69 percent drop in quarterly profit on the year.
Nalco reported consolidated profits of ₹2.56 billion (US$31 million) in the quarter, off from the consolidated profit of ₹8.31 billion (US$100.6 million). The state-run firm blamed a drop in demand and a spike in costs for the shortfall.
Specifically, the worldwide rise in the price of coking coal and the similarly steepening price of caustic soda cut into the already narrow margin for the firm in the latter portion of 2022. The price of raw materials spiked by a whopping 70.5 percent from the end of 2021 as well, while power and fuel costs jumped by 26 percent.
In addition, revenue from operations fell to ₹32.9 billion, off by 12.8 percent on the year.
Nalco was also hindered by falling aluminium prices, as prices at the London Metal Exchange retreated from record highs in the beginning of the year. Just this year prices dropped 15 percent due to the Russian invasion of Ukraine, lingering COVID-19 concerns, and apprehension of a coming recession.
In a statement, the firm said the bottom line continues to suffer for like reason.
“Lower sales volume of alumina during the quarter, higher input costs coupled with global challenging business scenario and volatility has affected the profit margins.”
“With firming up of aluminium prices globally and higher productions volumes, we are sure that it will certainly add to the profit margins in the coming quarters,” the company vowed later in the statement.
Nalco was not alone in the pain of last quarter, as Hindalco Industries announced a drop of almost two thirds in quarterly profit for similar reasons the day before.