Edible oil major Adani Wilmar on Wednesday reported a net loss of Rs 79 crore in the June quarter due to lower income amid fall in prices of cooking oils during the first quarter of financial year 2023-24 as against a profit of Rs 193.59 crore during the corresponding quarter of FY23.
It posted revenue from operations at Rs 12,928.08 crore, down 12.2 per cent as against Rs 14,724.09 crore during the first quarter FY23. Adani Wilmar said that the Q1 profitability was impacted by decline in edible oil prices that continued in Q1 as well, leading to high-cost inventory, dis-alignment on hedges, TRQ disparity, and finance cost. Adani Wilmar further added, “The wholly owned subsidiary in Bangladesh made losses of ~Rs 21 crore in Q1, due to price caps by the Government on edible oils, local currency-related issues, and unavailability of counterparty for forex hedging. This has resulted in lower consolidated PAT, compared to the standalone PAT.” The company EBITDA stood at Rs 130 crore, down 71 per cent on-year.
The prices of edible oils have been declining since Q1 of the last fiscal year. This trend continued during Q1FY24 with the price of edible oils experiencing further decline, in the range of 5 per cent to 20 per cent (Q1FY24 vs Q4FY23), before recovering as the quarter came to a close. This reduction has been attributed to a combination of factors, including the decline in consumer demand in developed economies, easing of supply at the Black Sea region and robust production of oilseeds globally. “Our margins during the quarter got impacted by high-cost inventory in a falling edible oil price environment and dis-aligned hedges compared to spot prices of physical commodity,” said Angshu Mallick, MD & CEO, Adani Wilmar Limited.