MY KOLKATA EDUGRAPH
ADVERTISEMENT
regular-article-logo Sunday, 26 May 2024

Adani Wilmar reports Rs 131 crore net loss in July-September quarter on sluggish edible oil business

The company, which sells edible oil and other food products under the Fortune brand, had posted a net profit of Rs 48.76 crore in the year-ago period

PTI New Delhi Published 01.11.23, 03:02 PM
Representational image.

Representational image. Shutterstock

Edible oil major Adani Wilmar on Wednesday reported a consolidated net loss of Rs 130.73 crore for the September 2023 quarter, as profitability was badly impacted in the cooking oil business.

The company, which sells edible oil and other food products under the Fortune brand, had posted a net profit of Rs 48.76 crore in the year-ago period.

ADVERTISEMENT

Its total income also fell to Rs 12,331.20 crore during the July-September period of 2023-24 from Rs 14,209.20 crore in the corresponding period of the previous fiscal, according to a regulatory filing.

The total expenses of Adani Wilmar -- an equal joint venture between business conglomerate Adani Group and Singapore-based Wilmar -- stood at Rs 12,439.45 crore during the second quarter of this fiscal against Rs 14,149.62 crore in the year-ago period.

In volume terms, the company's sales grew 11 per cent to 1.46 million tonnes.

Adani Wilmar MD & CEO Angshu Mallick said, "While the profitability in edible oils was impacted consecutively for the second quarter, we believe that the abnormality will soon reverse".

Adani Wilmar said 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, it added.

During the second quarter, the edible oil business contributed 58 per cent to the total volumes. However, the cooking oils accounted for 74 per cent of the total revenue from operations, which stood at Rs 12,267 crore.

Going forward, Adani Wilmar said the gap between spot and future prices has narrowed, and hence, it expects the profitability of edible oils to come back to normal levels in terms of gross margin and EBITDA per tonne.

Food & FMCG and industry essentials businesses are expected to continue their profitability momentum.

"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 and food categories, given the immense focus on expanding our direct reach and rural town coverage.

"We see a huge potential for packaged oils & foods in the rural markets. Today, 30 per cent of our sales come from rural towns, wherein more than 70 per cent population resides. In the past 6 months, we have added over 13,000+ towns, and we will continue this growth," Mallick said.

He also highlighted that the out-of-home consumption continues to grow, with our HoReCa business showing volume growth of over 50 per cent on a quarter-on-quarter basis.

"The revenues from the branded products under the Food & FMCG segment have been growing consistently at 40 per cent plus YoY (year-on-year) in the past 8 quarters. We are also simultaneously building our branded exports business, where we see the potential to serve the Indian diaspora abroad," he said.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

Follow us on:
ADVERTISEMENT