Hindalco reports robust performance for quarter ended 30 June 2017

11 August 2017

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  • Standalone revenue at Rs.10,407 crore (up 28 per cent over Q1 FY2017)
  • Standalone EBITDA at Rs.1,404 crore (up 4 per cent over Q1 FY2017)

Highlights Q1 FY2018

  • Prepaid Rs.4,505 crore in April 2017 at Hindalco standalone and Rs.894 crore in July 2017 at Utkal - To date total prepayment of Rs.5,399 crore in FY2018
  • Coal security further improved for Aluminium Business with new coal linkage of 2.9 million tonne in Q1 FY2018
  • Stable operations – Production of Aluminium at 321 kilotonne | Alumina at 724 kilotonne
  • Cathode production at 109 kilotonne up 67 per cent vs. Q1 FY2017
  • Novelis achieved record Q1 shipments of 785 kilotonne, up 4 per cent compared to previous year; Automotive shipments increased by 16 per cent

Financial Highlights

(Standalone – Unaudited)

(Figure in Rs. Crore)
Description Q1 FY 17 Q4 FY17 Q1 FY18
Revenue from Operations 8,159 11,747 10,407
Earning Before Interest, Tax and Depreciation (EBITDA)      
Aluminium 871 918 875
Copper 264 497 322
Others (including Other Income) 216 155 207
Total EBITDA 1,351 1,570 1,404
Depreciation 338 380 379
Finance Costs 600 541 488
Earnings before Exceptional Items and Tax 413 648 537
Exceptional Income/ (Expenses) (Net) - - (104)
Profit Before Tax 413 648 433
Profit/ (Loss) After Tax 294 503 290
Earnings per Share (EPS) - Basic (In Rupees) 1.4 2.4 1.3

Standalone highlights

Hindalco has attained Revenues of Rs.10,407 crore, up 28 per cent compared to Q1 FY2017, driven by higher volumes and realisation. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) was Rs.1,404 crore, up 4 per cent compared to the previous year, on account of higher aluminium and copper volumes, supportive macros partly offset by higher input cost. Depreciation was up by 12 per cent due to progressive capitalisation. Interest expense was lower by 19 per cent mainly on account of prepayment of loan. Net Profit for Q1 FY2018 at Rs.290 crore versus Rs.294 crore in the previous year. The net profit for the current quarter factors the exceptional provisioning of Rs.104 crore which is on the basis of recent Supreme Court judgement in a matter relating to mining regulation (to which the company was not a party). The company anticipates that the judgement may have an implication on its existing litigation which is subjudice. The provision has been made as a matter of abundant caution.

Business highlights

The standalone Aluminium Revenue for Q1 FY2018 was up by 9 per cent Y-o-Y at Rs.5,008 crore, driven by higher sales of Aluminium metal and increased realisation. EBITDA was in line with the last year at Rs.875 crore, given higher volumes with stable plant operations and supportive macro factors, partly offset by increase in input costs.

For Q1 FY2018, Aluminium metal production stood at 321 kilotonne and Alumina (including Utkal Alumina) of 724 kilotonne. Aluminium metal production was up 4 per cent and Alumina production was up 2 per cent as compared to Q1 FY2017. VAP (including Wire Rod) production was at 120 kilotonne, up 15 per cent as compared to the previous year. Aditya, Mahan and Utkal Alumina continue to operate at their rated capacities.

The revenue from Copper Segment was up 51 per cent Y-o-Y at Rs.5,403 crore, driven by higher volume and higher copper LME realisation. EBITDA stood at Rs.322 crore, up 22 per cent as compared to the previous year due to higher volumes (the plant had a planned shutdown in the previous year), partly offset by lower by-products prices and higher input cost.

For Q1 FY2018, the company’s Cathode production was 109 kilotonne and CC rod 40 kilotonne. Cathode production was up 67 per cent and CC rod production was up 7 per cent as compared to Q1 FY2017. DAP production was at 67 kilotonne, 29 per cent lower vs. Q1 FY2017 impacted by operational issues.

Utkal Alumina International Limited:
The EBITDA for Q1 FY2018 increased by 207 per cent to Rs.291 crore on the back of higher realisation.

Utkal Alumina is amongst the lowest cost producers globally. During the quarter, Utkal Alumina refinery produced 384 kilotonne of alumina, up 3 per cent vis-a-vis the previous year.

Novelis Inc.:
Net sales increased 16 per cent Y-o-Y to USD 2.7 billion in Q1 FY2018. This was the outcome of a 4 per cent increase in total shipments of flat rolled products to 785 kilotonne, including a 16 per cent increase in shipments of automotive products, as well as higher average aluminium prices.

Adjusted EBITDA, defined as excluding metal price lag, increased 8 per cent to USD 289 million in Q1 FY2018 from USD 268 million in the previous year. Higher shipments, ongoing operational improvements, and a favourable product mix comprised the major drivers. This was partially offset by pricing pressures in beverage can.

Novelis reported a Net income of USD 101 million for the first quarter of fiscal year 2018, compared to net income of USD 24 million in the previous year.

In line with its commitment, the company strengthened its balance sheet by reducing its gross debt. Hindalco delivered a robust operational performance. The overall demand from user industries remained subdued due to apprehension of the GST roll out. However with the smooth implementation of GST, in the long run the economy is expected to grow at a faster pace. High level of Aluminium and Copper imports and an increase in domestic aluminium production continue to impact domestic sales volumes. Hindalco remains focused on accelerated deleveraging, operational excellence, higher value addition, customer centricity and cash conservation to deliver stakeholder value.

Statements in this “Press Release” describing the company’s objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assume no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.