Adani Wilmar management blames sharp fall in edible oil prices for Q1 losses

economictimes.indiatimes.com:

Angshu Mallick, CEO & MD, and Shrikant Kanhere, CFO, Adani Wilmar, in conversation with ET Now post Q1 results. Adani Wilmar reported a loss of Rs 79 crore in the June 2023 quarter and revenue was down 12%. According to Mallick, the company suffered because edible oil prices have come off very sharply and Adani Wilmar was not able to contra-hedge the local oils, particularly in India, as there is no such hedging mechanism.What impacted the performance this time around? Is there any one-off, any exceptionals that is impacting the profitability?Angshu Mallick: The good part to note is that there has been a 25% increase in volumes.

Edible oil has shown very good growth of 27% volume quarter on quarter. We have not seen such kinds of growth in edible oil, particularly branded edible oil. Fortune as a brand has grown faster and we see such kind of traction because of the prices coming down and edible oil prices have really come off so consumers have come back to their preferred brand.

In food, we continue to grow at more than 20% for eight consecutive quarters. So growth-wise, we are now consistent on our food growth and today the food business as a volume contributes almost 25% of our edible oil volume. Industry essential also has shown growth of more than 21%.

That is mainly because of the oleochemical business, castor oil and the soya meal and rapeseed meal that we export. So overall, volume-wise, we are very satisfied. What has happened is that the edible oil prices have come off very sharply and we are not able to contra-hedge the local oils, particularly in India, as there is no such hedging mechanism.