Hindalco reports Q1 FY23 financial results

Diversified business model once again delivers record-breaking profitability

Quarterly Net Profit at an all-time high of Rs.4,119 crore, up 48 per cent YoY

Key Highlights of Q1 FY23 (vs Q1 FY22)

• All-time high quarterly Consolidated PAT at Rs.4,119 crore, up 48 per cent YoY
• All-time high quarterly Consolidated EBITDA at Rs.8,640 crore, up 27 per cent YoY 
• Record quarterly Novelis Adjusted EBITDA at $561* million, up 1 per cent YoY
• Record quarterly Novelis Adjusted EBITDA per ton at $583*, up 2 per cent YoY
• Quarterly Aluminium Upstream EBITDA at Rs.3,272 crore, up 41 per cent YoY; EBITDA margins at 38 per cent
• Quarterly Aluminium Downstream EBITDA at Rs.158 crore, up 305 per cent YoY; EBITDA per ton at $261, up 306 per cent YoY
• Record quarterly Copper EBITDA at Rs.565 crore, up 116 per cent YoY; All-time high Copper Rod sales at 80 Kt, up 73 per cent YoY
• Consolidated Net Debt to EBITDA at a strong 1.40x as of June 30, 2022 vs 2.36x as of June 30, 2021
  *As per US GAAP

Hindalco Industries Limited, the Aditya Birla Group metals flagship, once again reported its highest net profit in Q1 FY23, surpassing its record performance in Q4 FY22. The company’s consolidated PAT peaked to an all-time high of Rs.4,119 crore, a 48 per cent growth YoY, and 7 per cent sequentially despite rising costs and inflationary pressures.  

The results were driven by an excellent performance by Novelis, and a robust performance by Aluminium Downstream and Copper businesses, supported by operational efficiencies and higher volumes. 

Novelis reported its best-ever quarterly EBITDA and EBITDA per tonne, primarily due to higher product pricing, favourable product mix and recycling benefits.

*As per US GAAP 

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

“After the record profitability of the fourth quarter, I am pleased to share that we delivered an even stronger first quarter despite rising input costs and inflationary pressures. Our performance was backed by strong operational efficiencies and pre-emptive sourcing of critical raw material, thus ensuring stable operations and higher margins. Our business model supports our position as an integrated aluminium producer with one of the world’s best EBITDA margins.  

Our product mix enhancement strategy is working well with the Aluminium Downstream EBITDA growing four-fold YoY. Novelis reported its highest ever EBITDA per ton driven by higher product pricing, favourable product mix and higher recycling benefits. Looking ahead, we remain focused on riding all market cycles with our greener, stronger, smarter approach.”

Consolidated Results  

Hindalco reported an all-time high EBITDA of Rs.8,640 crore (vs Rs.6,790 crore) in Q1 FY23, up 27 per cent YoY. The excellent results were driven by better macros, robust performance of Aluminium Downstream and Copper businesses along with better operating efficiencies.  

Consolidated revenue for the first quarter stood at Rs.58,018 crore (vs Rs.41,358 crore), up 40 per cent YoY. Consolidated PAT in Q1 FY23 was at a record Rs.4,119 crore up from Rs.2,787 crore in Q1 FY22, a jump of 48 per cent YoY. Consolidated Net Debt to EBITDA remained strong at 1.40x on June 30, 2022 compared to 2.36x on June 30, 2021.

Business Segment Performance in Q1 FY23 (vs Q1 FY22) 

Novelis 

Novelis reported its best ever quarterly adjusted EBITDA of $561 million (vs $555 million), up 1 per cent YoY, primarily due to higher product pricing, favourable product mix and higher recycling benefits. Novelis reported record adjusted EBITDA per ton of $583 in Q1 FY23, compared to $570 in the prior year quarter.  
Novelis’ Net Income from continuing operations in Q1 FY23 was $307 million, up 1 per cent YoY, mainly driven by underlying Adjusted EBITDA, unrealised derivative gains, and a lower tax provision in the current year. Revenue was at $5.1 billion (vs $3.9 billion), up 32 per cent YoY, driven by higher global aluminium prices. Total shipments of flat rolled products (FRPs) were at 962 Kt vs 973 Kt in Q1 FY22, marginally lower due to supply chain constraints.

Aluminium 

Aluminium Upstream EBITDA stood at Rs.3,272 crore in Q1 FY23, compared with Rs.2,317 crore for Q1 FY22, an increase of 41 per cent YoY, primarily due to favourable macros, higher volumes, better operational efficiencies, partially offset by higher input costs. Upstream EBITDA margins were at 38 per cent and continue to be the best in the industry. Upstream revenue was Rs.8,699 crore in Q1 FY23 vs Rs.6,151 crore in the prior year period. Third party shipments of primary aluminium stood at 333 Kt (325 Kt), up 2 per cent YoY in Q1 FY23.

Aluminium Downstream EBITDA stood at Rs.158 crore in Q1 FY23, compared with Rs.39 crore for Q1 FY22, an increase of 305 per cent YoY, primarily due to better pricing of downstream products. EBITDA per ton for Aluminium Downstream stood at $261 vs $64 in Q1 FY22, an increase of 306 per cent YoY. Downstream revenue was Rs.2,740 crore in Q1 FY23 vs Rs.2,293 crore in the prior year period. Sales of downstream aluminium stood at 78 Kt vs 82 Kt in Q1 FY23.

Copper 

EBITDA for the business was at a record Rs.565 crore in Q1 FY23 compared to Rs.261 crore in Q1 FY22, up 116 per cent YoY, on the back of higher domestic sales, better operational efficiencies and improved by-product margins. Revenue from the Copper Business was Rs.10,529 crore this quarter, up 48 per cent YoY, primarily due to higher global prices of copper and higher volumes.

Copper Cathode production was at 92 Kt in Q1 FY23 (vs 63 Kt in Q1 FY22) while copper rod production was 79 Kt in Q1 FY23 (vs 44 Kt in Q1 FY22). Overall copper metal sales were at 101 Kt (vs 80 Kt in Q1 FY22). Copper Continuous Cast Rod (CCR) sales at a record 80 Kt in Q1 FY23 (vs 46 Kt in Q1 FY22), were up 73 per cent YoY driven by improved quality and reliable operations.

Business Updates & Recognition 

• Additional 350 Kt expansion via debottlenecking at Utkal Alumina in progress. 
• Novelis’ approximately $3.4 billion of strategic capital investment projects have commenced. 
• Hindalco signed an MoU with Phinergy, a leading Israel-based pioneer in metal-air battery technology, and IOC Phinergy Private Limited (IOP), for R&D and pilot production of aluminium plates for Aluminium-Air batteries.