Hindalco Q2 PAT declines 60 pc to Rs 387 cr

By: |
November 10, 2020 7:46 PM

The company's PAT declined during the second quarter due to a one-time impact of Rs 1,398 crore on account of the divestiture of the Lewisport unit of Aleris in the US, Hindalco Industries Ltd Managing Director Satish Pai told reporters at a virtual meeting.

The company had posted a PAT of Rs 974 crore in the corresponding quarter of previous fiscal, Hindalco Industries Ltd said in a filing to the BSE.The company had posted a PAT of Rs 974 crore in the corresponding quarter of previous fiscal, Hindalco Industries Ltd said in a filing to the BSE.

Hindalco Industries on Tuesday reported a 60.2 per cent fall in consolidated profit after tax (PAT) at Rs 387 crore for the quarter ended September 30, but said it is expecting a strong third and fourth quarter as demand has returned in domestic as well as export markets.

The company’s PAT declined during the second quarter due to a one-time impact of Rs 1,398 crore on account of the divestiture of the Lewisport unit of Aleris in the US, Hindalco Industries Ltd Managing Director Satish Pai told reporters at a virtual meeting.

The company had posted a PAT of Rs 974 crore in the corresponding quarter of previous fiscal, Hindalco Industries Ltd said in a filing to the BSE.

However, its revenue from operations during July-September quarter rose to Rs 31,237 crore from Rs 29,657 crore in the year-ago period.

The company said its results were driven by a strong performance by its wholly-owned subsidiary Novelis, and India aluminium business, supported by higher volumes and better product mix, lower input costs, stability in operations, and cost saving initiatives.

“It is heartening to see a sharp recovery of demand to near pre-Covid levels in India aluminium and copper businesses. Novelis too sees a similar rise across segments, except for aerospace,” Pai said.

“Operationally, we have maintained high efficiency and productivity, thus enabling us to deliver a sharp increase in PAT as compared to both last quarter and last year,” he added.

He said the company is confident that Aleris acquisition will prove to be accelerative to shareholders going forward.

“I think that this quarter, the operational results, show that the path forward is very good. In short, it shows us that we have a one-time loss to take on the sale on this board, which was USD 170 million. And we’re disappointed with what we think was not the fair treatment given to Hindalco and Novelis by the Department of Justice,” Pai said.

Talking about sale of Aleris Corp’s aluminium production plant in Duffel, Belgium to Alvance, the international aluminium business of GFG Alliance’s Liberty Steel Group, Pai said the company has already got 210 million euros and another 100 million euros is under dispute.

“With Liberty house, the price that was agreed in the December-January time frame was 310 million euros. After Covid, Liberty house has tried to negotiate the price. So, the agreement we made was 210 million euros and for the remaining 100 million euros, we will arbitrate and their opposition is quite strong,” he added.

He said the company is getting strong forward orders which will lead to a strong third and fourth quarters.
“Probably in July and August there was a pent up demand. But, you can’t have six months of pent up demand. And we are seeing that the forward orders are very strong. So, we are expecting Q3 and Q4 to be very strong as well,” he added.

However, the rise in coal and oil prices will lead to rise in production cost for the company going ahead.

“In the third quarter, we probably will see the cost more or less at the same level as the second quarter. But I want to highlight that we are seeing that the coal prices have started to go up. Oil prices have also started to go up. So, we will see some cost inflation probably in the fourth quarter,” he stated.

Pai said capex guidance for 2020-21 remains the same at Rs 1,500 crore, of which Rs 350 crore has been spent.
“Going forward, we will be very tight on capex as we are trying to reduce the debt of Novelis,” he added.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1RNLI takes 40,000 sq ft on lease at BKC’s Adani Inspire to house corporate HQ
2IATA urges Centre to support Indian airlines to tide over COVID crisis
3Nasscom: Over 50% tech startups see revenue reaching pre-Covid level in 6 months, cash in hand improves