India's Adani Wilmar posts 60% drop in Q4 profit on weak edible oils demand

Sundrop Brands

03/05/2023 08:43

BENGALURU/CHENNAI, May 3 (Reuters) - India's Adani
Wilmar Ltd  ADAW.NS  reported a 60% slump in fourth-quarter
profit on Wednesday, as lower product prices and sluggish demand
from some customers dragged down overall sales in its mainstay
edible oils business.
    The Fortune cooking oil maker's consolidated net profit fell
to 936.1 million rupees ($11.44 million) for the quarter ended
March 31, from 2.34 billion rupees, a year earlier.
    "Our margins ... got impacted by high-cost inventory in a
falling edible oil price environment, inflation impact on our
operational costs and an increase in interest costs due to rate
hike," said Adani Wilmar Chief Executive Officer Angshu Mallick.
    Adani Wilmar, a joint venture between Adani Group and
Singapore's Wilmar Group  WLIL.SI , said its total expenses fell
5.9% to 138.16 billion rupees.
    Edible oil prices have cooled off in recent months on the
back of easing commodity prices, but demand is yet to fully
recover as some customers including in the bakery and frying
industry are cutting back.
    Sales value in its edible oil business declined 13% during
the quarter even as volumes were flat.
    That led to a 7% decline in overall sales value, Adani
Wilmar, which competes with Sundrop cooking oil maker Agro Tech
Foods  AGRO.NS  and Saffola-parent Marico  MRCO.NS , said in a
press release.
    Overall revenue from operations fell 7% to 138.73 billion
rupees.
    Separately, Adani Wilmar said the board re-appointed Mallick
as the managing director and CEO for a period of three years,
effective April 1.
    Adani Wilmar shares have lost about a third of their value
since Jan. 24 after U.S. short seller Hindenburg Research put
out a critical report about the Adani Group's finances.
    The stock declined more than 2% on Wednesday.
    

($1 = 81.8450 Indian rupees)

 (Reporting by Dimpal Gulwani in Bengaluru and Praveen
Paramasivam in Chennai; Editing by Nivedita Bhattacharjee)
 ((Dimpal.Gulwani@thomsonreuters.com;))