Hindalco announces Q2FY 2014-15 standalone results (unaudited)

13 November 2014

  • Excellent operational performance in both Aluminium and Copper Businesses.

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  Vs. Q2 FY14
Revenues Rs. 8,554 crore 36%
PBITDA Rs. 1,120 crore 37%
Profit before Exceptional Items and Tax Rs. 539 crore 22%

Net profit impacted by one timers of Rs. 431 crore (net) comprising

  • Provision for additional levy on coal as per Hon. Supreme Court order : Rs. 563 crore
  • Provision for Diminution in investment value : Rs. 258 crore
  • Foreign exchange gain on Return of Capital : Rs. 361 crore
  • Write back of Provision : Rs. 29 crore
Financial Highlights

(In Rs. crore) Q2FY15 Q1FY15 Q2FY14 H1FY15 H1FY14
Revenue from operations 8,554 7,996 6,305 16,550 12,143
EBITDA 897 748 540 1,645 1,018
Other income 223 216 280 440 708
PBITDA 1,120 965 820 2,085 1,726
Depreciation 196 187 196 383 379
Finance costs 386 338 183 723 332
Profit before Exceptional Items and Tax 539 440 440 979 1,015
Exceptional Item 431 - - 431 -
Profit after Exceptional Item 107 440 440 547 1,015
Tax expenses 29 113 83 141 184
Net profit 79 328 357 406 831
Basic EPS (not annualised) 0.38 1.59 1.85 1.97 4.32

Hindalco the Aditya Birla Group flagship company, today announced its unaudited results for the second quarter ending 30 September 2014.

Net sales stood at Rs.8,554 crore as compared to Rs.6,305 crore in the corresponding quarter of the previous year. Profit before Interest, Depreciation and Tax (PBITDA) was Rs.1,120 crore versus Rs.820 crore in the corresponding quarter of the previous year. Profit before Tax and exceptional items was Rs.539 crore vis-a-vis Rs.440 crore attained in the sequential quarter as well as in the corresponding quarter of the previous year.

Higher sales reflect increased volume and higher realisation in both aluminium and copper businesses. PBITDA for the quarter improved despite a sharp surge in the cost of coal.

Other income was lower compared to Q2FY14 as previous year’s income included certain one-timers and dividends from subsidiaries. Finance cost has increased during the quarter on progressive capitalisation of the company’s greenfield projects.

Depreciation was at Q2FY14 level, despite higher capitalisation, mainly due to the revision of useful life of certain assets in compliance with Schedule II of the Companies Act, 2013.

Exceptional items (net) include the following:

  • Liability provision of Rs.563 crore towards additional levy of Rs.295 per MT on coal extracted by the company from the commencement of the production of coal from Talabira I mine in FY04 up to September 2014 in compliance with the order dated 24 September 2014 of the Hon. Supreme Court of India.
  • Provision of Rs.258 crore towards diminution in carrying value of investment in Aditya Birla Minerals Limited, Australia, a subsidiary of the company, arising on significant decline in value of the company’s investment therein as reflected in decline in its quoted share price over a considerable period of time.
  • Reversal of Rs.29 crore out of the liability provided for in the previous year on account of UP Tax on Entry of Goods into Local Areas Act, 2007 (UP Entry Tax), following completion of assessment.
  • Foreign exchange gain of Rs.361 crore in connection with receipt of Rs.1,394 crore from A V Minerals (Netherlands) N. V., a wholly owned subsidiary of the company, towards return of capital by reducing nominal value of shares.

Coal mines
The Hon’ble Supreme Court of India, in its judgment dated 25.08.2014 and order dated 24.09.2014, has declared all allocations of the coal blocks made through Screening Committee route since 1993 as illegal and has quashed the allocation of 204 coal blocks. These coal blocks include Talabira-I block held and operated by the company and three other coal blocks viz. Mahan, Tubed and Talabira II & III allocated to the company jointly with others and were being developed by respective joint venture companies established for that purpose. In case of Talabira-I coal block, the cancellation shall have effect from 31 March 2015 subject to payment of an additional levy of Rs.295 per MT of coal extracted since beginning till 31 March 2015.

Pursuant to the orders of the Hon’ble Supreme Court, the Government of India has promulgated the Coal Mines (Special Provisions) Ordinance, 2014 on 21.10.2014, which inter alia provides for allocation of cancelled coal blocks by way of auction and bidding process. The ordinance also provides for payment of compensation to prior allottees towards investments made in “land and mine infrastructure’’ for which details have already been submitted to the Ministry of Coal. The company propose to participate in the bidding process for suitable coal blocks to meet its coal requirement in future.

Business results
Of the total revenue of Rs.8,554 crore, Aluminium Business contributed Rs.3,316 crore vs. Rs.2,343 crore in Q2FY14. The higher revenue is attributable to higher volume and higher realisation. As a result, the segment results of Aluminium Business also improved from Rs.166 crore in Q2FY14 to Rs.339 crore in Q2FY15 despite higher coal cost.

In the Copper Business, revenue moved up to Rs.5,247 crore from Rs.3,974 crore in Q2FY14. The performance of the Copper Business reflected enhanced volume, better TcRc and improved by-product credit. The segment results soared from Rs.239 crore in Q2FY14 to Rs.414 crore in Q2FY15.

Sequentially, compared to Q1FY15, both segments have posted improved results.

Operational review

Metal production was up substantially to 187 Kt vs. 140 Kt in Q2FY14, consequent to the ongoing ramp-up at Mahan smelter. It was at the same level as Q1FY15 since smelting operations at Aditya Aluminium and at Hirakud smelter, both in Odisha were affected by natural calamities, in the early part of the current quarter. Restoration activities in these facilities are almost complete now.

Alumina production (including Utkal) increased by 41 per cent to 531 Kt over Q2FY14. The standalone results do not include performance of Utkal Alumina refinery, as it is a subsidiary of the company.

Cathode production was higher at 96 Kt as against 77 Kt in Q2FY14.

To sum up, with additional capacity coming on stream in Aluminium Business, the company will further consolidate its leadership position and is well-poised to benefit from the expected upturn in the economy.

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.