14 February 2017
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Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) has reported a consolidated revenue of Rs.3,388 crore for the quarter ended 31 December 2016, up by 8 per cent over the previous year. EBITDA surged by 22 per cent to Rs.955 crore driven by Financial Services business. Net profit at Rs.206 crore de-grew year-on-year due to the reduction of ABNL’s share in Idea’s net profit by Rs.242 crore. Net profit of Idea Cellular has been impacted due to free voice and mobile data services by the new entrant in the sector coupled with higher interest and amortisation costs.
Highlights of the results:
Aditya Birla Financial Services Aditya Birla Financial Services is one of the largest non-bank financial services players and ranks among the top 5 fund managers in India (excluding LIC). Its assets under management (AUM) rose by 24 per cent to Rs.229,500 crore. Its quarterly revenue grew by 27 per cent to Rs.2,417 crore and earnings before tax by 19 per cent to Rs.278 crore.
Aditya Birla Finance Ltd. (ABFL) ranks among the top 7 private NBFCs in India (excluding housing finance companies). Its lending book has expanded by 34 per cent to Rs.29,852 crore, ahead of the competition. ABFL has created a well diversified portfolio. The quality of portfolio remains sound with gross NPA at 0.69 per cent and net NPA at 0.33 per cent. It reported a healthy average Return on Equity at 16.6 per cent per annum and average Return on Asset at 2.23 per cent per annum. Led by equity infusion and strong internal accruals, its net worth has risen by 50 per cent to Rs.4,238 crore.
Aditya Birla Housing Finance Ltd., has extended its loan book from Rs.1,232 crore in December 2015 to Rs.3,235 crore in December 2016. Its net worth has gone up to Rs.375 crore. The business has turned profitable within 7 quarters of full operations.
Birla Sun Life Insurance ranks 4th among the private players in India. The new business premium market share is at 7.7 per cent. It remained the number 1 private life insurer in the Group segment with a 27.0 per cent share. During the quarter, its individual new business premium rose by 61 per cent and the total new business doubled year-on-year.
Birla Sun Life Asset Management registered 27 per cent year-on-year growth in its quarterly average AUM (AAUM) at Rs.194,927 crore. Its position as India’s 4th largest asset management company stands strengthened with an improved market share of 10.68 per cent. The strong focus on scaling up retail and high margin assets continued, with its domestic equity AAUM expanding by 33 per cent to Rs.43,440 crore and PMS AAUM more than doubling to Rs.2,746 crore.
Aditya Birla Insurance Brokers enhanced its market share from 1.86 per cent to 2.30 per cent led by a 69 per cent rise in premium placement while general insurance industry’s premium rose by 36 per cent.
Aditya Birla Health Insurance Co. Ltd. launched its operations with a differentiated business model to catalyze expansion of Health Insurance market in India. It will have a multi-channel distribution model across agency, broking, bancassurance, direct marketing, online channel etc. The agency channel commenced with 9 branches across 7 cities, it will expand its reach further in the next couple of years.
Aditya Birla Money MyUniverse, India’s number 1 online personal finance management portal, enjoys the trust of more than 3.2 million registered users who are managing over Rs.20,000 crore through this portal.
Telecom (Idea Cellular) Idea Cellular ranks 3rd in India with an improved revenue market share of 18.7% up from 18.5% a year ago. Having a base of 192 million active subscribers, Idea is the 6th largest cellular operator in the world in terms of subscribers, based on operations in a single country. Idea’s quarterly consolidated revenue de-grew by 4 per cent to Rs.8,663 crore and EBITDA declined sharply by 24 per cent to Rs.2,166 crore, impacted by the free offerings by the new entrant along with minor effects of demonetisation. Idea remains committed to building world class mobile broadband services and is targeting to offer Pan India wireless broadband services (3G / 4G) by March - April 2017 in all of its 22 service areas from the existing 17 service areas.
Divisions (Jaya Shree, Indo-Gulf Fertilisers, Indian Rayon and Aditya Birla Insulators) ABNL’s divisions are India’s leading manufacturers of linen, urea, viscose filament yarn (VFY) and insulators. Their combined quarterly revenue at Rs.1,217 crore was lower year-on-year by 15 per cent due to the pass through of reduction in natural gas prices in the Agri business, coupled with lower volumes in the Textiles and the Insulators businesses. The quarterly EBITDA at Rs.128 crore was lower year-on-year by 33 per cent. Return on average Capital Employed, during these nine months, remained healthy at 19 per cent per annum.
Demonetisation led to temporary liquidity shortage in the trade channel as well as downstream players in the Textiles and Agri value chain. EBITDA of Indian Rayon de-grew from Rs.65 crore to Rs.55 crore on account of lower volumes in Viscose Filament Yarn and caustic soda. Indo-Gulf fertilizers reported an EBITDA of Rs.51 crore vis-à-vis Rs.63 crore in the previous year. Constrained by sluggish demand, EBITDA of Jaya Shree textiles fell from Rs.35 crore to Rs.9 crore while EBITDA of Aditya Birla Insulators declined from Rs.27 crore to Rs.12 crore.
Payments Bank: ABNL had incorporated ‘Aditya Birla Idea Payments Bank Ltd.’ in joint venture with Idea Cellular in February 2016. The senior management team is in place and is planning to launch payments bank services by the first half of the calendar year 2017, after obtaining the requisite approvals from RBI.
Solar Power: The business is in the process of setting up 60 MW solar power capacity in Karnataka. The commissioning of the plants is targeted by the first quarter of FY2017-18. The business has received infusion of about Rs.60 crore as equity contribution from the JV partners for funding of the project.
Standalone Balance SheetThe proceeds of Rs.1,664 crore from the sale of 23 per cent stake in Birla Sun Life Insurance and realisation of fertilisers subsidy has led to reduction in the Standalone Net Debt from Rs.3,935 crore in March 2016 to Rs.2,190 crore in December 2016. Net Debt to EBITDA stood at 2.6 times and Net Debt to Equity at 0.22 times. ABNL has realised the fertilisers subsidy of Rs.115 crore in January 2017.
Dividend Policy The Board has approved the Dividend Distribution Policy for the company as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The objective of this policy is to provide the dividend distribution framework to the stakeholders of the company.
Going ForwardFor 2016-17, ABNL has planned a capex of about Rs.300 crore for its divisions including towards the expansion of Linen Yarn and VFY capacities. Besides, there will be a capital requirement to the tune of about Rs.900 crore in the Financial Services businesses. During the nine months period, the company has invested Rs.182 crore as capital expenditure for divisions and Rs.482 crore as capital infusion in the Financial Services businesses.
Composite Scheme of Arrangement for amalgamation of ABNL with Grasim
Post receipt of the approvals from the stock exchanges and the Competition Commission of India, application has been filed with National Company Law Tribunal. The transaction is expected to be completed by the first half of fiscal 2017-18.
About Aditya Birla Nuvo Ltd.Aditya Birla Nuvo is a USD 3.6 billion conglomerate with leadership position across its businesses. Its Financial Services business (including NBFC, Housing Finance, Life Insurance, Asset Management, Health Insurance, General Insurance Advisory, Private Equity, Broking, Wealth Management and Online Money Management) ranks among the top 5 fund managers in India. Its Telecom venture, Idea Cellular, ranks among the top 3 cellular operators in India. It is a leading player in Linen, Agri, Rayon and Insulators businesses. ABNL has recently ventured into the Solar Power businesses. It has also received an in-principle approval from RBI to set up a Payments Bank in joint venture with Idea Cellular. Aditya Birla Nuvo is a part of the Aditya Birla Group, a USD 41 billion Indian multinational. The Aditya Birla Group is in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe. About 50 per cent of its revenues flow from its overseas operations.
Disclaimer: Certain statements in this “Press Release” may not be based on historical information or facts and may be “forward looking statements” within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans and strategy of the company, its future outlook and growth prospects, future developments in its businesses, its competitive and regulatory environment and management's current views and assumptions which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. The company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise. This “Press Release” does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the company’s shares. The financial figures in this “Press Release” have been rounded off to the nearest rupees one crore. The financial results are consolidated financials unless otherwise specified.
Dr. Pragnya RamGroup Executive President, Corporate Communications & CSRAditya Birla Management Corporation Private LimitedAditya Birla Centre, 1st Floor, 'C' WingS.K. Ahire Marg, WorliMumbai 400 030.
91-22-6652 5000 /2499 5000
Fax: 91-22-6652 5741/ 42