Hindalco Industries on Monday reported a decline of 37.42%, in consolidated net profit to R2,456 crore in the year to March 2011, despite a 19% rise in consolidated net revenues during the year to R72,078 crore. The growth in the top line was driven by strong volumes from its aluminum and copper businesses and also an improved product mix and higher commodity prices. However, higher spends on expansion and increased input costs and also higher outflows on interest payments resulted in some pressure on margins.
Says Rakesh Arora, head of Research at Macquarie Securities, ?The results have been more or less in line with expectations with some one-off items.? Arora added that some delays in commissioning of the Mahan project, along with a three month delay at Utkal would not impact the company materially.
Hindalco?s wholly- owned subsidiary, Novelis posted a net income of $116 million as per US GAAP accounting norms. Its adjusted ebitda at $1.1 billion was up by 42% while free cash flows were $310 million. According to HSBC, ?The fourth quarter of 2010-11 was yet another strong quarter for Novelis with the ebitda per tonne at $363 and the adjusted ebitda at $280 million. ? HSBC observed that operating cash flows had increased due to better working capital management. Hindalco plans to invest over $6.5 billion in India and overseas in the next three years to expand its aluminum rolling and recycling operations in South Korea and to set up three new aluminum smelters and two alumina refineries in Odisha, Madhya Pradesh and Jharkhand.
Of the total annual revenues of R72,078 crore in 2010-11, the company?s aluminium business contributed R56,084 crore, up 17% over the last year. Revenues from copper were higher at R15,887 crore, a rise of 26%. The aluminum maker’s earning before interest, interest, tax, depreciation and amortisation (Ebitda) declined to R8,433 crore from R10,069 crore a year ago mainly because of inclusion of R2,736 crore of unrealised gains from derivatives in FY10, while it made a loss of R291 crore in FY2011. Shares of Hindalco Industries on Monday slipped 2.33% to close at R192.90 on the BSE. Interest costs rose mainly due to one-time debt issuance cost related to the refinancing of $ 4.8 billion at its US unit, Novelis, in December and consequent higher interest in Q4 of FY11.