06 August, 2021
ShareNovelis and Aluminium India Business drive highest-ever quarterly net profits
*As per US GAAP
Mumbai: Hindalco Industries Limited, the Aditya Birla Group metals flagship, delivered stellar results in Q1 FY22 recording its highest-ever quarterly net profits.
The Company's consolidated PAT was at Rs.2,787 crore, which is a noteworthy increase of nearly 500 per cent YoY. The results were driven by a strong performance by Novelis and India Business, supported by favorable macros, strategic product mix, and stability in operations. Novelis reported an all-time high quarterly EBITDA, as a result of upswing in demand for innovative and sustainable aluminium products and an outstanding operational performance.
Particulars | Q1 FY21 | Q4 FY21 | Q1 FY22 |
---|---|---|---|
Revenue from Operations | 25,283 | 40,507 | 41,358 |
Earning Before Interest, Tax, Depreciation & Amortisation (EBITDA) | |||
Novelis* | 1,919 | 3,705 | 4,090 |
Aluminium | 973 | 1,820 | 2,352 |
Copper | 66 | 322 | 261 |
All Other Segments | 1 | 13 | (6) |
Business Segment EBITDA | 2,959 | 5,860 | 6,697 |
Unallocable Income/ (Expense) - (Net) & GAAP Adjustments | (600) | (15) | 93 |
EBITDA | 2,359 | 5,845 | 6,790 |
Finance Costs | 992 | 903 | 820 |
PBDT | 1,367 | 4,942 | 5,970 |
Depreciation & Amortisation (including impairment) | 1,551 | 1,722 | 1,649 |
Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax) | 3 | - | 2 |
Profit before Exceptional Items and Tax | (181) | 3,220 | 4,323 |
Exceptional Income/ (Expenses) (Net)# | (419) | 34 | 2230 |
Profit Before Tax (After Exceptional Item) | (600) | 3,254 | 4,553 |
Tax | (31) | 1,309 | 1,299 |
Profit/ (Loss) from Continuing Operations | (569) | 1,945 | 3,254 |
Profit/ (Loss) from Discontinued Operations | (140) | (17) | (467) |
Profit/ (Loss) After Tax | (709) | 1,928 | 2,787 |
*As per US GAAP ; # Exceptional Income / (Expenses) for Q1FY22, exclude ?346 crore (net of litigation cost of ?9 crore) which represents the principal portion on PIS and COFINS related tax credit income as it is included in the Novelis segment result |
Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries Ltd., said, "This quarter we delivered record-breaking financial results despite the impact of the Covid second wave. Our robust financial performance, accelerated pace of deleveraging and the increasing strength of our balance sheet has been recognised by the market and is reflected in credit rating upgrades for both Novelis and Hindalco.
The improvement is visible across all our business segments where we are seeing strong demand, plants running at capacity, and better margins. We continue to keep employees protected and de-risk plant facilities by taking all Covid-appropriate measures. We have started FY22 at a strong pace and we are confident that our resilience against market swings will support us in continuing to deliver our best. More importantly, we believe our focus on setting and achieving carbon neutrality and other ESG goals will keep Hindalco in the leadership position as the world's most sustainable aluminium value-added player."
Novelis
Novelis recorded its best-ever quarterly Adjusted EBITDA of $555 million (vs $253 million), up 119 per cent YoY, on the back of higher volumes, favourable product mix and metal benefits, and a $47 million gain related to a favourable decision in a Brazilian tax litigation.
Novelis achieved an Adjusted EBITDA per ton of $570 in Q1 FY22, compared to $327 in the prior year, an increase of 75 per cent YoY. Excluding the non-recurring tax litigation benefit, Adjusted EBITDA per ton equates to $522 in the first quarter of FY22.
Novelis' Net Income (excluding tax-effected special items) was $260 million, up 1082 per cent YoY, driven by higher Adjusted EBITDA. Revenue was $3.9 billion (vs $2.4 billion), up 59 per cent YoY, due to higher shipments, global aluminium prices and market premiums. Total shipments of flat rolled products (FRPs) were at 973 Kt (vs 774 Kt), up 26 per cent YoY, with strong demand across end-product markets particularly beverage packaging and specialty products, partially offset by some headwinds in the automotive industry on account of the semiconductor chip shortage.
Aluminium India
EBITDA was at an all-time high of Rs.2,352 crore in Q1 FY22, compared with Rs.973 crore for Q1 FY21, an increase of 142 per cent YoY, primarily due to favourable macros, improved product mix and better operational efficiencies. EBITDA margins reached a 13-year high of 37.5 per cent and continue to be among the best in the industry. Revenue was Rs.6,267 crore in Q1 FY22 vs Rs.4,436 crore in the prior year period. Aluminium India Business recorded metal production of 319 Kt vs 291 Kt in the corresponding period. Aluminium metal sales were flat YoY at 303 Kt. Aluminium VAP (excluding wire rods) sales volumes were at 82 Kt (vs 35 Kt), up 137 per cent YoY, driven by a sharp recovery in the domestic market. VAP sales, as a percentage of total metal sales, were 27 per cent this quarter vs 11 per cent in the same quarter last year, in line with market recovery.
Copper
Successful ramp-up of Smelter-3, post shutdown in Q1 FY22. Copper Cathode production was at 63 Kt in Q1 FY22 (vs 41 Kt in Q1 FY21), higher by 52 per cent YoY. While overall copper metal sales were at 80 Kt (vs 58 Kt in Q1 FY21), Copper Continuous Cast Rod (CCR) sales in Q1 FY21 were up 50 per cent, at 46 Kt (vs 31 Kt in Q1 FY21), driven by market recovery. EBITDA for the Business stood at Rs.261 crore compared to Rs.66 crore in Q1 FY21, up 295 per cent YoY. Revenue from the Copper Business was Rs.7,094 crore this quarter, up 134 per cent YoY, primarily due to higher global prices of copper.
Hindalco reported another best-ever quarterly financial performance in Q1 FY22 with EBITDA at Rs.6,790 crore (vs Rs.2,359 crore), up 188 per cent YoY. The record results were driven by an outstanding performance by Novelis as well as India business, supported by a sharp recovery in all relevant markets, and improved macros. Consolidated Revenue for the first quarter stood at Rs.41,358 crore (vs Rs.25,283 crore), up 64 per cent YoY. Consolidated PAT in Q1 FY22 was Rs.2,787 crore, compared to a loss of Rs.(709) crore in Q1 FY21, a jump of 493 per cent YoY. Gross Debt declined by Rs.16,345 crore and Net Debt fell by Rs.10,389 crore as of June 30, 2021 from its peak on June 30, 2020. Consolidated Net Debt to EBITDA ratio improved further to 2.36x on June 30, 2021, from a peak of 3.83x on June 30, 2020.
Hindalco has prepared to tackle the third wave of Covid by fortifying its efforts to protect employees and the community.
Over 51,000 employees have been vaccinated with at least one dose. In some states, the Government is collaborating with Hindalco to vaccinate the local population at the Company's own hospitals and health centres. Hindalco's dedicated team of 77 doctors and 245 paramedics is working round the clock to serve employees and the community.
Hindalco has boosted medical infrastructure and equipped its own hospitals and health centres with critical care equipment such as CT scan machines, set up oxygen lines in remote locations to serve patients needing ICU care, and enhanced its lab testing facilities. Hindalco has strengthened its medical teams, including adding pediatricians, and upskilling its paramedics.
Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group. An $18 billion metals powerhouse, Hindalco is the world's largest aluminium company by revenues, and a major player in copper. 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 48 manufacturing units across 10 countries.
Registered Office: Ahura Centre, 1st Floor, B Wing, Mahakali Caves Road Andheri (East),
Mumbai 400 093; Website: www.hindalco.com; E mail: hindalco@adityabirla.com;Corporate Identity No. L27020MH1958PLC011238
Disclaimer: Statements in this “Media Release” describing the company’s objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assume no responsibility to publicly amend, modify or revise any forward-looking statement, on the basis of any subsequent development, information or events, or otherwise.