Hindalco reports consolidated fourth quarter and full year FY22 results

26 May 2022
Quarterly Net Profit doubles to a record-high of Rs.3,851 crore
Full year Net Profit jumps four times to Rs.13,730 crore

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Key Highlights of Q4 FY22 (vs Q4 FY21)

  • All-time high Consolidated PAT at Rs.3,851 crore, up 100 per cent YoY
  • Consolidated EBITDA at Rs.7,597 crore, up 30 per cent YoY
  • Novelis Net Income from continuing operations at $217* million, up 21 per cent YoY
  • All-time high quarterly Aluminium India EBITDA at Rs.4,050 crore, up 123 per cent YoY; EBITDA margins of 41 per cent

Key Highlights of FY22 (vs FY21)

  • Consolidated EBITDA at Rs.30,056 crore, up 59 per cent; margin at 15 per cent YoY
  • Consolidated PAT jumped nearly four times to Rs.13,730 crore, up 294 per cent YoY
  • Record Novelis Adjusted EBITDA at $2.0* billion, up 19 per cent YoY
  • Novelis Adjusted EBITDA per ton at $530*, up 12 per cent YoY
  • Record Novelis Net Income from continuing operations at $1.0 billion, up 122 per cent YoY
  • Aluminium India Business EBITDA at Rs.13,025 crore, up 139 per cent; margin at 41 per cent
  • Consolidated Net Debt to EBITDA at a strong 1.36x as of March 31, 2022 vs 2.59x as of March 31, 2021
  • Board recommends dividend @400 per cent (Rs.4/share) for FY22 as against 300 per cent (Rs.3/share) for FY21
  • Hindalco retains position as world’s most sustainable aluminium company in DJSI 2021
  • Hindalco achieves ‘S&P Global Sustainability Yearbook 2022 - Gold Class’ distinction

*As per US GAAP

Mumbai: Hindalco Industries Limited, the Aditya Birla Group metals flagship, has outperformed financially and operationally, reporting its highest ever quarterly net profit in Q4 FY22. The Company’s consolidated PAT peaked to a record-high of Rs.3,851 crore, a 100 per cent growth YoY. The results were driven by an exceptional performance by India Business, supported by favourable macros, strategic product mix and an improved performance by the downstream business. Novelis’ Q4 results were impacted primarily due to cost inflation, semiconductor chip shortage in automotive and other short-term operational issues.

Consolidated Financial Highlights for the Full Year and Quarter ended March 31, 2022

(Rs. crore)
Particulars Q4 FY21 Q3 FY22 Q4 FY22 FY21 FY22
Revenue from Operations 40,507 50,272 55,764 1,31,985 1,95,059
Earning Before Interest, Tax, Depreciation & Amortisation (EBITDA)          
  Novelis* 3,705 3,792 3,247 12,727 15,229
  Aluminium 1,819 3,376 4,050 5,441 13,025
  Copper 322 390 387 869 1,390
  All Other Segments 13 22 7 26 26
Business Segment EBITDA 5,859 7,580 5,691 19,063 29,670
  Unallocable Income/ (Expense) - (Net) & GAAP Adjustments (14) 44 (94) (167) 386
EBITDA 5,845 7,624 7,597 18,896 30,056
Finance Costs 903 852 805 3,738 3,768
PBDT 4,942 6,772 6,792 15,158 26,288
Depreciation & Amortisation (including impairment) 1,722 1,742 1,761 6,766 6,884
Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax) - 3 1 5 6
Profit before Exceptional Items and Tax 3,220 5,033 ,5,032 8,397 19,410
Exceptional Income/ (Expenses) (Net) # 34 165 (251) (492) 164
Profit Before Tax (After Exceptional Item) 3,254 5,198 4,781 7,905 19,574
Tax 1,309 1,538 921 2,723 5,373
Profit/ (Loss) from Continuing Operations 1,945 3,660 3,860 5,182 14,201
Profit/ (Loss) from Discontinued Operations
(17) 15 (9) (1,699) (471)
Profit/ (Loss) After Tax 1,928 3,675 3,851 3,483 13,730
EPS (Rs./share) 8.7 16.5 17.3 15.7 6.17

Note: *As per US GAAP ;
#Exceptional Income / (Expenses) for the quarter and the year ended March 31, 2022, exclude Rs. Nil and Rs. 418 crore, respectively, which represents the principal portion of (a) PIS/COFINS related tax credit income in Brazil Rs.Nil for the Q4FY22 and Rs. 358 crore (net of litigation cost of Rs. 9 crore) for YTD FY22 and (b) tax rebates for sales to Manaus, Brazilian Free Trade Zone Rs. Nil for the Q4FY22 and Rs. 60 crore for YTD FY22, as it is included in the results of Novelis segment.

Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries, said:

“With record profitability in the fourth quarter, we had a very good end to the year. We attribute Hindalco’s highest-ever profits not just to strong macros, but also our consistent focus on operational excellence and cost optimization. We continue to remain one of the world’s lowest cost and highest EBITDA margin producers of aluminium.

Our strategy to build a more sustainable business model that is isolated from metal cycles is working very well for us. In line with this, we have allocated over 70 per cent of our growth capex to value-enhancing downstream segments. All our growth capex for the next five years will be funded out of internal accruals.

Our growth strategy will continue to be shaped by our 2050 ESG goals – achieving Net Zero in carbon emissions, effluent discharge, biodiversity loss and waste to landfill. To sum up, Hindalco sees a positive horizon which inspires us to invest in future-centric growth projects.”

Business Segment Performance in Q4 FY22 (vs Q4 FY21)

Novelis
Novelis reported quarterly adjusted EBITDA of $431 million (vs $505 million), down 15 per cent YoY, primarily due to cost inflation, semiconductor chip shortage in automotive and other short-term operational issues, and a non-recurring regulatory provision taken in the quarter. Novelis reported an Adjusted EBITDA per ton of $437 in Q4 FY22, compared to $514 in the prior year.

Novelis’ Net Income from continuing operations was $217 million, up 21 per cent YoY, mainly driven by lower interest expense in Q4 FY22. Revenue was $4.8 billion (vs $3.6 billion), up 34 per cent YoY, driven by higher global aluminium prices. Total shipments of flat rolled products (FRPs) were up at 987 Kt vs 983 Kt in Q4 FY21.

Aluminium India
EBITDA was at an all-time high of Rs.4,050 crore in Q4 FY22, compared with Rs.1,819 crore for Q4 FY21, an increase of 123 per cent YoY, primarily due to favourable macros, higher volumes, better operational efficiencies, and improved performance of downstream business offset by higher input costs. EBITDA margins were at 41 per cent and continue to be the best in the industry. Revenue was Rs.9,847 crore in Q4 FY22 vs Rs.5,969 crore in the prior year period. Aluminium India Business recorded metal production of 326 Kt vs 316 Kt in the corresponding quarter. Aluminium metal sales were up 2 per cent YoY at 336 Kt vs 329 Kt in the prior year. Aluminium VAP (excluding wire rods) sales volumes were at a record 93 Kt (vs 92 Kt), up 1 per cent YoY, driven by recovery of the domestic market. VAP sales, as a percentage of total metal sales, were at 28 per cent this quarter which was the same as the prior year quarter.

Copper
Copper Cathode production was at 94 Kt in Q4 FY22 (vs 97 Kt in Q4 FY21) while copper rod production was 69 Kt in Q4 FY22 (vs 76 Kt in Q4 FY21). Overall copper metal sales were at 105 Kt (vs 107 Kt in Q4 FY21), Copper Continuous Cast Rod (CCR) sales in Q4 FY22 were up 2 per cent YoY, at 74 Kt (vs 73 Kt in Q4 FY21). EBITDA for the business stood at Rs.387 crore in Q4 FY22 compared to Rs.322 crore in Q4 FY21, up 20 per cent YoY, on the back of better operational efficiencies and improved by-product realisations. Revenue from the Copper Business was Rs.9,787 crore this quarter, up 15 per cent YoY, primarily due to higher global prices of copper and higher volumes.

Consolidated Results
Hindalco reported an EBITDA of Rs.7,597 crore (vs Rs.5,845 crore), up 30 per cent YoY. The results were driven by positive macros and focus on downstream value-added products along with better operating efficiencies. Consolidated Revenue for the fourth quarter stood at Rs.55,764 crore (vs Rs.40,507 crore), up 38 per cent YoY. Consolidated PAT in Q4 FY22 doubled to a record Rs.3,851 crore from Rs.1,928 crore in Q4 FY21, a jump of 100 per cent YoY. Consolidated Net Debt to EBITDA was at a strong 1.36x on March 31, 2022 compared to 2.59x on March 31, 2021.

Business Updates & Recognition

  • Aleris Integration work continues with over $110 million run-rate combination cost synergies achieved
  • Novelis announced $3.4 billion* of strategic capital investments towards transformational organic growth over the next five years:
    • $2.5 billion investment in greenfield Rolling Mill in Alabama, US
    • $365 million highly advanced recycling centre with an annual recycling and sheet ingot casting capacity of 240 Kt in Guthrie, Kentucky in North America
    • $130 million investment at Oswego, New York, plant to debottleneck and increase hot mill rolling capacity and enhance automotive sheet finishing capabilities
    • $375 million investment to expand rolling and recycling capabilities in Zhenjiang, China
    • $50 million investment in Ulsan, South Korea to expand recycling capabilities
  • Utkal Refinery fully ramped to 2.1 MT; Additional 350 Kt expansion via debottlenecking in progress
  • Won Meenakshi captive coal mine with approximately 12 MTPA capacity
  • Retained position as world’s most sustainable aluminium company in the Dow Jones Sustainability Indices 2021
  • Achieved ‘S&P Global Sustainability Yearbook 2022 - Gold Class’ distinction.

*excluding the projects under appraisal

About Hindalco Industries Limited
Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group. A $26 billion metals powerhouse, Hindalco is the world’s largest aluminium company by revenues, and a major player in copper. It is also one of Asia’s largest producers of primary aluminium.

Guided by its purpose of building a greener, stronger, smarter world, Hindalco provides innovative solutions for a sustainable planet. Its wholly-owned subsidiary Novelis Inc. is the world’s largest producer of aluminium beverage can stock and the largest recycler of used beverage cans (UBCs).

Hindalco’s copper facility in India comprises a world-class copper smelter, downstream facilities, and a captive jetty. The copper smelter is among the world’s largest custom smelters at a single location. Hindalco’s global footprint spans 50 manufacturing units across 10 countries.

Hindalco was named the world’s most sustainable aluminium company in the Dow Jones Sustainability Indices (DJSI) in 2020 and 2021.

Disclaimer: Statements in this “Media 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.