Bengaluru (Reuters) – India’s Adani Wilmar Ltd (ADAW.NS) swung to a loss in the first quarter on Wednesday as a steep decline in edible oil prices dragged down its sales value, offsetting high demand.
The fast-moving consumer goods maker’s consolidated net loss for the quarter ended June 30 came in at 789.2 million rupees ($9.56 million), compared with a profit of 1.94 billion rupees a year earlier.
Higher sales volume on the back of robust urban and rural demand for its products was offset by the continued decline in edible oil prices, the Adani group company said.
Edible oil prices have fallen by more than 50% in less than a year, which along with higher material costs in April, resulted in pressured profitability during the quarter.
“Our margins got impacted by high-cost inventory in a falling edible oil price environment,” said Adani Wilmar Chief Executive Officer Angshu Mallick.
The edible oil and industry essentials segment reported a 15% slump each in sales value, even as total sales volume rose by 25%.
The Fortune cooking oil maker earlier flagged a decline in consumer demand in developed economies and robust production of oilseeds globally as reasons for the fall in edible oil prices.
The company reported a 12.2% fall in revenue from operations to 129.28 billion rupees with a 14.5% decline in the edible oil segment.
Additionally, the industry essentials segment reported a 15.6% decline in revenue owing to a steep correction in prices of Oleo and Castor products.
Rival Saffola-parent Marico (MRCO.NS), reported a bigger-than-expected rise in quarterly profit on the back of lower input costs even as revenue fell on sluggish rural demand.
Adani Wilmar’s shares fell as much as 4.2% after the results.
