KOLKATA (Commodity Online): National Aluminium (Nalco), India’s biggest aluminium producer, witnessed a fall in net profit in July-September 2009.

Its net profits came down by 64% to Rs 159.5 crore against Rs 444.5 crore in the corresponding period last year, largely due to lower sales realisation and higher energy costs.

With global metal prices remaining soft during the quarter under review, Nalco saw its sales revenue go down to Rs 1,199.2 crore during the second quarter, resulting a 28.4% dip over a revenue of Rs 1,675.9 crore in the same period last year.

During second quarter this year, the company capitalised several pots in its smelter plant. This led to an additional power requirement which it had to meet by using imported washed coal. The company had to rely on coal imports since it is yet to get the necessary coal linkages to meet its increased power needs.

The use of imported washed coal led to an additional cost burden of Rs 118 crore, which in turn, eroded the company’s profitability during the quarter under review.

Additionally, Nalco also saw its power costs go up substantially since it had to use nearly 50% higher volumes of furnace oil to make use of wet coal in the rainy season.

As a result, Nalco registered a profit before tax of Rs 205.4 crore in Q2 this year against Rs 689.3 crore in the same period last year.

In the first half of 2009-10, Nalco saw its net profit drop by more than a third to Rs 285.9 crore against Rs 969.8 crore in the first half of previous fiscal. Sales too went down to Rs 2,169.7 crore in the first half of this year between April and September, against Rs 3,282.3 crore in the same period last year.

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