12 February, 2020Share
Hindalco-Novelis demonstrate stability in the midst of unpredictable market conditions
* As per US GAAP
1 Tax-effected special items include restructuring & impairment, metal price lag, gain/loss on assets held for sale, loss on extinguishment of debt, loss/gain on sale of business
Mumbai: Hindalco Industries Limited, a global leader in aluminium and copper, today announced consolidated results for the third quarter ended 31 December 2019. 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.
|Particulars||Q3 FY19||Q2 FY20||Q3 FY20||9M FY19||9M FY20|
|Revenue from Operations||33,213||29,657||29,197||96,797||88,826|
|Earning Before Interest, Tax, Depreciation & Amortisation (EBITDA)|
|- All Other Segments||(21)||5||(6)||(42)||(15)|
|- Unallocable Income/ (Expense) - (Net) & GAAP Adjustments||35||172||(56)||287||156|
|Depreciation & Amortisation (including impairment)||1,221||1,249||1,302||3,530||3,786|
|Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax)||1||1||2||2||4|
|PBT before Exceptional Items and Tax||1,931||1,748||1,487||6,358||4,813|
|Exceptional Income/ (Expenses) (Net)||-||(256)||(6)||-||(284)|
|Profit Before Tax (After Exceptional Item)||1,931||1,492||1,481||6,358||4,529|
|Profit/ (Loss) After Tax||1,394||974||1,062||4,317||3,099|
*As per US GAAP
# Q3 FY20 EBITDA includes savings of Rs. 43 crore on account of regulatory changes related to Renewable Power Obligations (RPO) and Rs. 72 crore on account of reversal of provision of such regulatory changes for the first half of FY20.
Novelis delivered a continued strong operational and financial performance in Q3 FY20. Total shipments of flat rolled products (FRPs) were at 797 Kt, which is flat year-on-year. Beverage can sheet and automotive body sheet shipments, however, were higher by 4 per cent and 3 per cent respectively, driven by growing consumer preference for sustainable packaging and light-weight vehicles. Novelis recorded its highest Q3 EBITDA of US$343 million, a growth of 7 per cent over the prior year. Adjusted EBITDA per ton was US$ 430 in Q3 FY20, up 7 per cent year-on-year. Novelis reported a net income (excluding tax-effected special items) of US$132 million in Q3 FY20, an increase of 31 per cent over Q3 FY19. Revenue was down 10 per cent year-on-year at US$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.
Reported revenue of Rs.5,467 crore in Q3 FY20 (Rs.6,019 crore a year ago) was down 9 per cent, due to lower realisations. EBITDA stood at Rs.1,036# crore in Q3 FY20, compared to Rs.1,252 crore in Q3 FY19. Stable operations in the Indian Aluminium Business helped achieve Alumina (including Utkal) and Aluminium metal production of 662 Kt and 330 Kt respectively in Q3 FY20. Aluminium Metal sales volume grew 2 per cent to 328 kt in Q3 FY 20. Aluminium VAP (excluding wire rods) volumes remained flat year-on-year, at 75 kt.
Overall production volumes (Copper Cathodes) were down 18 per cent year-on-year to 86 Kt in Q3 FY20, compared to the prior year. The Copper Business’ Value Added Product (VAP) production was at 60 Kt, lower by 8 per cent year-on-year. Total VAP sales were up 3 per cent at 58 Kt in Q3 FY20, which is in line with market growth. Total copper metal sales were lower by 14 per cent, at 84 Kt in Q3 FY20, versus 99 kt in Q3 FY19 on account of lower production. Revenue from the Copper Business was Rs.4,774 crore in Q3 FY20 versus Rs.5,943 crore a year ago. EBITDA was lower at Rs.256 crore in Q3 FY20 compared to Rs.490 crore in Q3 FY19, down by 48 per cent year-on-year, primarily due to lower volumes and realisations in Q3 FY20.
Hindalco’s consolidated revenue for Q3 FY20 stood at Rs.29,197 crore compared to Rs.33,213 crore in the same quarter last year. Total EBITDA was at Rs.3,676 crore in Q3 FY20 (versus Rs.4,080 crore in Q3 FY19), down by 10 per cent year-on-year. 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. Profit After Tax (PAT) stood at Rs.1,062 crore in Q3 FY20, down by 24 per cent, compared to the third quarter of FY19. The consolidated net debt to EBITDA ratio was 2.65x as on 31 December 2019 versus 2.48x on 31 March 2019.
Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries Limited, 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. In Q3 FY20, 80 per cent of our consolidated EBITDA was non-LME linked. These trends bear out our focus on building our downstream, value-added portfolio, both for domestic and international markets. 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.”
Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group. A US$18.7 billion metals powerhouse, Hindalco is the world’s largest aluminium rolling and recycling company, and a major copper player. 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, a fertiliser plant and a captive jetty. The copper smelter is among the world’s largest custom smelters at a single location. Hindalco’s global footprint spans 36 manufacturing units across 10 countries.
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www.hindalco.com, E mail: firstname.lastname@example.org, Corporate Identity No. L27020MH1958PLC011238
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