Hindalco reports highest ever quarterly net of Rs 2,787 crore as metal prices shine

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August 07, 2021 1:30 AM

Operating income for the copper business was also up sharply by 295% y-o-y to Rs 261 crore. Revenues from the copper business at Rs 7,094 crore this quarter, was higher by 134% y-o-y, primarily due to higher global prices of copper.

A sharp surge in aluminium prices resulted in an all-time high Ebitda in the India aluminium business, which jumped 142% to Rs 2,352 crore during the quarter.A sharp surge in aluminium prices resulted in an all-time high Ebitda in the India aluminium business, which jumped 142% to Rs 2,352 crore during the quarter.

Hindalco Industries reported a strong first quarter performance and beat analyst estimates. Its quarterly performance was supported by good earnings from Novelis and a sharp increase in aluminium and copper prices, amidst a surging global demand for metals. The Aditya Birla Group company recorded its highest-ever quarterly net profit on a consolidated basis at Rs 2,787 crore for the quarter ended June 30, 2021. It had reported a consolidated net loss of Rs 709 crore in the corresponding quarter last year, which was its highest quarterly net loss ever.

Its consolidated revenues from operations during the quarter were up 63.6% y-o-y at Rs 41,358 crore. The results were driven by a strong performance by Novelis and India business, supported by favourable macros, strategic product mix, and stability in operations. The company’s consolidated Ebitda (earnings before interest, tax, depreciation and amortisation) was up 188% y-o-y to Rs 6,790 crore, as operating income surged both at Novelis and in the India business.

Novelis recorded its best-ever quarterly adjusted Ebitda of $555 million, up 119% y-o-y, on the back of higher volumes, favourable product mix and metal benefits, and a $47 million gain related to a favourable decision in a Brazilian tax litigation. Its adjusted Ebitda per tonne of $570 during the quarter was up 75% y-o-y.
A sharp surge in aluminium prices resulted in an all-time high Ebitda in the India aluminium business, which jumped 142% to Rs 2,352 crore during the quarter.

Ebitda margins reached a 13-year high of 37.5% riding on high aluminium prices. While the aluminium metal production was up 9.6% y-o-y to 319 Kt, sales were flat y-o-y at 303 Kt. However, a sharp recovery in the domestic market led to a 137% y-o-y increase in aluminium value added products sales volumes. VAP sales, as a percentage of total metal sales, were 27% in Q1FY22 versus 11% in the same quarter last year, in line with market recovery.

Operating income for the copper business was also up sharply by 295% y-o-y to Rs 261 crore. Revenues from the copper business at Rs 7,094 crore this quarter, was higher by 134% y-o-y, primarily due to higher global prices of copper.

Satish Pai, managing director, Hindalco Industries said, “This quarter we delivered record-breaking financial results despite the impact of the Covid second wave. Our robust financial performance, accelerated pace of deleveraging. The improvement is visible across all our business segments where we are seeing strong demand, plants running at capacity, and better margins. We have started FY22 at a strong pace and we are confident that our resilience against market swings will support us in continuing to deliver our best.”

The company’s gross debt declined by Rs 16,345 crore and net debt fell by Rs 10,389 crore as of June 30, 2021, from its peak on June 30, 2020. Consolidated net debt to Ebitda ratio also improved further to 2.36x on June 30, 2021, from a peak of 3.83x on June 30, 2020.

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