Hindalco arm Utkal Alumina's Q3 EBITDA jumps 73% on strong alumina prices

Firm to double alumina refinery capacity in Odisha to three million tonnes at a cost Rs 40-50 bn

Utkal Alumina International Ltd, a 100 per cent subsidiary of Aditya Birla-owned Hindalco Industries, has posted 73 per cent surge in its EBITDA (earnings before interest, taxes, depreciation and amortisation) in the December quarter.

Utkal Alumina's EBITDA rose to Rs 2.47 billion in the reporting quarter, up from Rs 1.43 billion a year ago, on the back of higher international alumina prices. The company's strong performance was also aided by stable operations.

During April-December, the company's EBITDA grew 82 per cent to Rs 7.4 billion. Utkal Alumina also recorded a net profit of Rs 1.18 billion in the December quarter, compared with a loss of Rs 550 million in the comparable period of last fiscal.

Post de-leveraging, Hindalco is now more focused on capacity expansion at Utkal Alumina, the company said in its latest investor presentation.

Utkal Alumina has sought environment clearance to double its alumina refinery capacity in Odisha to three million tonnes per annum (mtpa). The application is being currently vetted by the Expert Appraisal Committee (EAC) of the Ministry of Environment, Forests & Climate Change (MoEFCC).

The expansion, estimated to cost Rs 40-50 billion, would be done in phases. Initially, the alumina refinery near Kashipur in Rayagada district would be de-bottlenecked to reach a capacity of two mtpa. Investment in the first phase is pegged at Rs 10 billion.

The Utkal refinery is fed by the company's captive Baphlimali bauxite mines, with enough reserves to cater to the refinery's requirement for 25 years after ramp-up. The mine contains very low amount of silica, which provides a cushion against rising caustic soda prices.

Hindalco's Aditya smelter is fed by alumina primarily sourced from Utkal Alumina Ltd, a 100 per cent subsidiary of Hindalco Industries Ltd. Group company Aditya Aluminium owns an aluminium smelter of 360,000 tonnes per annum capacity supported by 900 Mw CPP (captive power plant) at Lapanga in Sambalpur district. It also has a facility for flat-rolled products, extrusion products and wire rods.