Hindalco profit falls 35% to Rs 160 cr

Higher financing charges, exceptional item hurt bottom line

Hindalco Industries on Thursday reported a much lower-than-expected net profit of Rs 160 crore in the March quarter, down 35 per cent from same period last year, mainly because of higher finance cost and an exceptional item of Rs 146 crore liability towards Renewable Power Obligation.

The company's finance cost more than doubled to Rs 466 crore in the March quarter from Rs 214 crore in the same period last year.

The bottomline was hit despite higher net sales which stood at Rs 9,372 crore in the period under review, up 11 per cent from the corresponding period last year.

As per Bloomberg estimates, the Aditya Birla Group company’s net sales were seen at Rs 8,304 crore in the final quarter of the financial year, while its bottomline was expected to be Rs 284 crore.

The company's operating profit, on the other hand, rose marginally by 1.6 per cent on a year-on-year basis to Rs 610 crore in the period under review.

The company's copper business saved the day for Hindalco Industries as it churned Rs 390 crore in the March quarter, higher compared with Rs 306 crore earned by the aluminium business. On year-on-year basis, copper results showed an 18 per cent rise, while aluminium earnings declined 14 per cent.

“Fall in LME (London Metal Exchange) prices of aluminium and decline in premiums of the metal were the main reasons for lower realisation in the aluminium business,” managing director Debnarayan Bhattacharya said at the earnings conference held here on Thursday.

At the topline level, company's copper business was the bigger contributor as it recorded revenues worth Rs 5,237 crore in the March quarter, as against aluminium which clocked Rs 4,141 crore.

“Higher TC/RC (treatment charges-refining charges) lent firm support to the copper business in the quarter gone by,” said Bhattacharya.

As on March 31, the company's gross debt stood at Rs 23,000 crore, said chief financial officer Praveen Maheshwari. “Our debt for Utkal alumina is on separate balance sheet and is another Rs 5,000 crore as on March 31,” he added.

Going ahead, the company has a capital expenditure plan of Rs 900 crore for the current financial year which is mainly for non-greenfield projects, said Bhattacharya.

Regarding the company's on the four coal blocks it won in the recent auction, the management said, while the mining lease is expected to come to the company in June, the process for tansfer of land rights from the earlier owners to Hindalco is currently underway.

Hindalco has won two coal mines in Chattisgarh and two in Jharkhand. Its Khatautia mine in Jharkhand is of 0.8 million tonne capacity, while the other three are one million tonne capacity each. Gare Palma IV/4 and Gare Palma IV/5 are located in Chattisgarh and the Dhar mine in Jharkahnd is among the non-operational ones.