Hindalco Q1 profit tanks 28% to Rs 1,063 cr on global downturn, lower commodity prices

HINDALCO

Hindalco kicked off the financial year on a weak note after reporting a massive 29 percent year-on-year fall in June quarter consolidated profit due to the global downturn and lower commodity prices amid trade tensions.

Profit declined to Rs 1,063 crore in the quarter ended June 2019, from Rs 1,475 crore in the same period last year.

Consolidated revenue from operations fell 3.6 percent to Rs 29,972 crore dented by copper and aluminium businesses.

“While profits were impacted by the global downturn and lower commodity prices, Hindalco held its ground and delivered a steady performance. Novelis led from the front to achieve record quarterly results, and the Indian businesses put up a resilient show amid subdued economic conditions,” the aluminium major said in its BSE filing.

Hindalco further said Novelis adjusted EBITDA (as per US GAAP) increased 11 percent year-on-year to $372 million and adjusted EBITDA per ton climbed 7 percent to $448 in Q1.

“This performance was driven by higher shipments coupled with favourable price and product mix, partially offset by less favourable recycling benefits due to lower aluminium prices,” the company explained.

Novelis net income (excluding special items) stood at $145 million, a 26 percent YoY rise.

Tax-effected special items included restructuring & impairment, metal price lag, gain/loss on assets held for sale, loss on extinguishment of debt, loss/gain on sale of business.

Novelis revenues were down 6 percent YoY at $2.9 billion in Q1FY20, mainly due to a fall in average base aluminium price, partially offset by higher total shipments and a favourable product price and mix, Hindalco said.

At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) degrew by 13 percent to Rs 3,769 crore and margin contracted 140bps to 12.6 percent compared to year-ago.

Copper business revenue in Q1 fell 8.4 percent to Rs 4,593 crore and its EBITDA dropped 23 percent to Rs 267 crore, compared to the same period last year, due to lower by-product volumes and realisations.

Revenue from aluminium business including Utkal Alumina was down 3 percent to Rs 5,472 crore and its EBITDA crashed 42 percent to Rs 889 crore due to lower realisations YoY in Q1.

The stock was quoting at Rs 176.80, down Rs 4.25, or 2.35 percent on the BSE at 1350 hours.

News Source: Moneycontrol

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