Hindalco’s Q4 consolidated net profit declines by 43%

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June 13, 2020 1:50 AM

The company said that it undertook financing of some bonds, and taking Rs 449 crore into account for that, as well as Rs 188 crore due to certain US GAAP-related adjustments, the profit after tax for the quarter would be Rs 1,305 crore.

The consolidated net profit for the fourth quarter ended March 31, 2020 declined by 43% to Rs 668 crore.

Demand pick-up has started and revival could be seen sooner than expected, said senior management at Hindalco, while the company posted a mixed set of numbers for the fourth quarter, beating analyst expectations on the revenue and operating income; however, net profits were lower than Bloomberg consensus estimates. The consolidated net profit for the fourth quarter ended March 31, 2020 declined by 43% to Rs 668 crore.

However, the company said that it undertook financing of some bonds, and taking Rs 449 crore into account for that, as well as Rs 188 crore due to certain US GAAP-related adjustments, the profit after tax for the quarter would be Rs 1,305 crore.

Revenue from operations declined by 13% to Rs 29,318 crore, due to lower LME prices during the quarter.

However, Ebitda (earnings before interest, tax, depreciation and amortisation) was up 6% to Rs 4,173 crore, contributed largely by Novelis, where the product mix improved in favour of auto. Aluminium, inspite of the LME being down, did better than the fourth quarter last year, as cost of production was down due to lower coal prices and other input costs. Consequently, Ebitda margins increased by a smart 260 basis points to 14.2%.

As regards capacities, Satish Pai, managing director, Hindalco, said that the company is operating at 99% capacity now versus 80% during April and May, as it continued operations during the lockdown period. Novelis, meanwhile, had to shut two plants in April and May; however, it now functions at 99% capacity.

Better cost efficiencies drove Novelis’ performance, coupled with favourable demand for lightweight, sustainable aluminium solutions across markets. Novelis recorded its highest-ever quarterly adjusted Ebitda of $383 million, a growth of 7% over the prior year. Q4FY20 adjusted Ebitda per ton touched $472, up 15% y-o-y, which was also a record high.

Hindalco Aluminium’s (including Utkal Alumina) Ebitda stood at Rs 1,039 crore in Q4FY20, up 3% y-o-y. Stable operations in the Indian aluminium business helped achieve aluminium metal production of 327 Kt, up 2% year-on-year. Aluminium sales , however, fell 3% y-o-y to 314 Kt in Q4FY20, due to the lockdown effect.

The copper business had an Ebitda of Rs 406 crore, up 9% y-o-y. Revenue from the business was Rs 4,717 crore in Q4, lower by 28% due to lower realisations and volumes. Total copper metal sales were lower by 14%, at 86 Kt, in Q4FY20, hit by the lockdown in March 2020.

Hindalco’s standalone net debt stood at Rs 15,594 crore for the year ended March 31, 2020, which did not change much compared to December 2019 at Rs 15,683 crore. Consolidated net debt to Ebitda ratio was 2.61x as of March 31, 2020 against 2.48x on March 31, 2019.

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