Hindalco Industries' Q1 consolidated net at Rs 1,063 cr, down 28% YoY

Lower LME prices, global downturn impact performance

Hindalco Industries, the flagship company of Aditya Birla Group company, today reported a consolidated net profit of Rs 1,063 crore in the June quarter, down 28 per cent from corresponding period last year on the back of weak LME prices.

"While profits were impacted by the global downturn and lower commodity prices, Hindalco held its ground and delivered a steady performance. Novelis led from the front to achieve record quarterly results, and the Indian businesses put up a resilient show amid subdued economic conditions," said Satish Pai, managing director at Hindalco Industries.

The company’s topline in the period under review stood at Rs 29,972 crore, down 3.5 per cent from last year as realisations impacted the topline.

Novelis revenue, which declined 6 per cent, was mainly due to a fall in average base aluminium price which was partially offset by higher total shipments and a favourable product price and mix, said Hindalco in its release.

The domestic aluminium business, reported a revenue of Rs 5,472 crore in Q1FY20, which was lower by 3.4 per cent from last year due to weak realisations. Meanwhile, revenue from the copper business was at Rs 4,593 crore in the quarter gone by as against Rs 5,012 crore a year ago. The copper production volumes were at 76,000 tonne in Q1FY20. The total copper (metal) sales remained steady at 82,000 tonnes in Q1FY20 vis-a-vis Q1FY19.  

The copper business recorded its highest quarterly value added product production at 66,000 tonnes in Q1FY20, up 2 per cent year-on-year. The VAP sales were up 3 per cent at 63,000 tonnes in the first quarter.

On a standalone basis, the performance was a dismal as the bottomline stood at Rs 22.58 crore as against Rs 413.53 crore in the same period last year.

While there are no estimates for consolidated earnings, Bloomberg estimates for Hindalco India business, bottomline stood at Rs 908 crore, while revenue was seen at Rs 10,732 crore.

The company’s operating profit at the consolidated level declined 31 per cent on year-on-year basis to Rs 1,576 crore.

Though power and fuel costs were high on year-on-year basis, better availability of rakes and lower import prices of coal saw a sequential marginal drop in costs of fuel by close to 3 per cent.

“Going ahead costs will come down marginally as we also plan to increase share of imported coal which is cheaper compared to our own captive mined coal,” informed Pai.

Commenting on the postponement of the Aleris acquisition, Pai said that he was hopeful that the deal will be finalised before January, the cut off deadline for the agreement.