Hindalco Industries, a subsidiary of the Aditya Birla Group, on Wednesday reported a 24 per cent year-on-year decline in its consolidated net profit at Rs 1,062 crore for the third quarter ended December 31, 2019. The aluminium and copper manufacturing company had posted net profit of Rs 1,394 crore in the same quarter last year.
During the October-December quarter, Hindalco's consolidated revenue fell 12.09 per cent to Rs 29,197 crore compared to Rs 33,213 crore in the year-ago period.
"In spite of subdued economic conditions, the company delivered steady quarterly results on the back of strong performance by Novelis, lower input costs and stable operations of the Indian businesses," Hindalco Industries said in a filing to the Bombay Stock Exchange.
Total EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) was at Rs 3,676 crore in Q3 FY20 compared to Rs 4,080 crore in Q3 FY19, registering a YoY decline of 10 per cent. The consolidated net debt to EBITDA ratio was 2.65x as on December 31, 2019 versus 2.48x on March 31, 2019.
Consolidated profit before exceptional items and tax was Rs 1,487 crore in Q3 FY20 compared to Rs 1,931 crore in the prior year, down by 23 per cent.
Segment wise, revenue from aluminium segment was down 9 per cent at Rs 5,467 crore versus Rs 6,019 crore a year ago, due to lower realisations. Revenue from the copper business was Rs 4,774 crore in Q3 FY20 versus Rs 5,943 crore a year ago.
Commenting on the Q3 results, Satish Pai, Managing Director, Hindalco Industries, said, "For the past few years, Hindalco has continuously focused on improving plant operations. These efficiencies have helped us stay strong and steady amid weak markets. Despite global conditions, Novelis showed an increase in can and auto sheet shipments, spurred by growing consumer preference for sustainable packaging options and automotive closed-loop recycling systems."
"All our strategic expansion projects in India and Novelis are on track. In January 2020, Novelis successfully issued US$ 1.6 billion bonds at attractive rates, reflecting the recognition and confidence in Hindalco-Novelis," Pai added.
Novelis, a subsidiary of Hindalco Industries, reported a net income (excluding tax-effected special items) of $ 132 million in Q3 FY20, an increase of 31 per cent over Q3 FY19. Revenue was down 10 per cent YoY at $2.7 billion in Q3 FY20, mainly due to a decline in average base aluminium prices and local market premiums, partly offset by favourable recycling benefits.
In January 2020, Novelis successfully issued $ 1.6 billion Bonds at 4.75 per cent due in 2030, to repay its existing $ 1.15 billion 6.25 per cent Bonds, due in 2024 with net interest savings of around $ 17 million per annum. "Balance proceeds of these Bonds will be used to finance the ongoing Aleris acquisition," it added.
Following Q3 earnings, shares of Hindalco Industries were trading 0.15 per cent lower at Rs 193.25 apiece on the BSE.
By Chitranjan Kumar
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