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  1. Provisioning cost dents Hindalco net 78% to Rs 79 cr

Provisioning cost dents Hindalco net 78% to Rs 79 cr

Hindalco Industries, the flagship company of the Aditya Birla Group, reported a 78% fall in standalone net profit...

By: | Mumbai | Updated: November 14, 2014 1:05 AM

Hindalco Industries, the flagship company of the Aditya Birla Group, reported a 78% fall in standalone net profit for the quarter ended September on account of a one-time provisioning cost towards coal levy and dimunition in the carrying value of investment in one of the subsidiaries.

Hindalco’s quarterly net profit stood at Rs 78.77 crore against Rs 357.11 crore in the corresponding quarter of the previous fiscal. The bottomline was impacted by exceptional one-offs totaling Rs 431 crore, including a liability provisioning of Rs 563 crore towards an additional levy of Rs 295/mt of coal extracted from the Talabira I mine as per Supreme Court order. The company also took a one-time charge of Rs 258 crore towards diminution in the carrying value of investment in Aditya Birla Minerals, Australia. But these exceptional expenses were to an extent offset by Rs 361 crore of foreign exchange-related gains.

Report-Card

The Supreme court had in its order dated September 24, 2014 quashed the allocation of 204 coal blocks, including four blocks allocated to Hindalco and its joint venture firms. Out of these, only Talabira I was operational since fiscal 2004, and it would be cancelled with effect from March 31, 2015.

Excluding the exceptional items, profit before tax stood 22% higher at Rs 539 crore despite finiance costs nearly doubling to Rs 386 crore.
However, on the operational front, the company reported a better-than-expected performance. Net sales rose 35.7% y-o-y to Rs 8,473 crore led by strong volume growth and realisations. In its aluminium business, while metal production rose 34% to 187 kt due to the ongoing ramp-up at the Mahan smelter, strong realisation growth due to an 11.6% rise in LME prices led to revenues from the aluminium segment rise 42% to
Rs 3,316 crore.

In the copper business, too, the company benefited from higher volumes, which led to revenues rising 32% y-o-y.

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