Hindalco announces Q3 FY2015-16 standalone results (unaudited)

09 February 2016

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  • Strong volume growth in aluminium segment – Highest-ever production
  • YoY:
    • Primary aluminium production up 35 per cent. Strong growth in Value Added Production (VAP)
    • Copper continued to deliver a steady performance even as copper revenues fell sharply due to 27 per cent fall in copper LME

Operationally strong quarter against the backdrop of severe macroeconomic headwinds. Robust business portfolio came to the fore during these challenging times

Financial highlights

(In Rs. crore) Q3FY16 Q3FY15 Q2FY16 9MFY16 9MFY15
Revenue from Operations 8,150 8,603 8,925 25,650 25,153
Other income 250 213 418 862 652
Profit Before Interest, Tax and Depreciation (PBITDA) 922 1,136 1,020 3,014 3,221
Depreciation 308 216 296 936 599
Finance costs 582 447 616 1,800 1,171
Profit before exceptional items and tax 31 472 109 278 1,451
Exceptional Items -   - -   -   431
Profit before tax 31 472 109 278 1,020
Tax expenses (9) 113 5 27 254
Net profit 40 359 103 251 766
Basic EPS – Rupees 0.2 1.74 0.50 1.22 3.71

Hindalco, the Aditya Birla Group flagship company, today announced its unaudited results for the quarter ended December 31, 2015. Revenues for the quarter were lower by 5 per cent as compared with the corresponding quarter of the previous financial year due to a sharp decline in aluminium and copper realisations. However, a strong increase in aluminium volumes and our thrust on value addition partially offset the impact of severe fall in realisations.

Operating results for the quarter were severely impacted by the sharp drop in London Metal Exchange prices and regional aluminium premium, the macro economic factors beyond the company's control. As a result combined decline in realisations, on Y-o-Y basis was over USD 700 per tonne of aluminium. However, strong operating performance on the back of ramp up of new age smelters; partly aided by softer input prices helped us in partially mitigating the realisation pressure. The Mahan smelter is now operating at full capacity and the Aditya smelter is well on course for full ramp up.

In line with the company's long-term strategy with regard to its coal mix, the first of the four coal blocks, won in the auction, Gare Palma IV/4 has started producing coal towards the end of the quarter. Profit before Interest, Tax and Depreciation (PBITDA) at Rs.922 crore reflects a robust operational performance in the face of these severe macro-economic headwinds.

Depreciation and finance cost were higher given the progressive capitalisation of Greenfield projects. These charges were higher by Rs.227 crore as compared with Rs.663 crore in Q3 FY15. As a result PBT for the quarter stood at Rs.31 crore, while net profit for the quarter ending Q3 FY16 was Rs.40 crore.

Compared to Q2FY16, revenues from operations were lower by 9 per cent, primarily a fall out of lower copper LME, even as aluminium revenues were higher on account of higher volumes. The reported PBITDA was lower by Rs.98 crore, while net profit was lower by Rs.63 crore. The interest costs declined marginally following the softening of interest rates.

Business results

(In Rs. crore) Q3FY16 Q3FY15 Q2FY16 9MFY16 9MFY15
Aluminium segment          
Net sales 4,248 3,636 4,173 12,387 9,963
Earnings Before Interest & Tax (EBIT) 81 384 29 364 1,043
Copper segment          
Net sales 3,905 4,976 4,757 13,276 15,213
Earnings Before Interest & Tax (EBIT) 348 396 350 1,042 1,127

During the quarter alumina production (including Utkal refinery) at 705 KT (kilotonnes) was 19 per cent higher as compared with Q3 FY15. The long distance conveyor at Utkal is operational. The published financials do not include Utkal performance. Aluminium metal production stood at 296 KT and was up 35 per cent on Y-o-Y basis. Despite higher volumes, the EBIT of aluminium segment declined because of lower realisations and higher depreciation. The copper segment continued to deliver a solid performance with supportive TcRc. Y-o-Y cathode production was steady at 94 KT, while fertiliser (DAP) production jumped 9 per cent to 89 KT. On Y-o-Y basis, the EBIT of the copper segment was lower due to significantly lower copper LME prices.

With macro economic headwinds continuing, even as the company faces challenging times it continues with its unrelented focus on operational excellence, enhanced value addition and cash conservation.

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.