Hindalco Q2 PAT at Rs 103 crore, up 31% annually

Higher revenue, other income lend firm support to the bottomline

Hindalco Industries reported a net profit of Rs 103.27 crore in the September quarter, up 31% from same period last year on the back of increased revenues and higher other income even as total expenses and finance cost mounted.

Net sales of the Aditya Birla company were up 4% on a year-on-year basis at Rs 8,840 crore in the period under review because of production ramp up at the company’s new smelters.

At the operating level, however, the company witnessed more than 50% fall to Rs 307 crore in the September quarter. “Operating results were severely impacted during the quarter because of severe drop in London Metal Exchange prices, fall in regional aluminium premium and macro economic factors beyond the company’s control,” said Hindalco in its release.

Other income which lent some support to the company’s bottomline in the period under review was up partly on account of certain non-recurring items amounting to Rs 119 crore, said the company. Hindalco’s other income stood at Rs 417 crore in September quarter, up 86% from corresponding period last year.

Progressive capitalisation of the green field projects carried out by the company pushed up the finance costs to Rs 615 crore in the period under review, about 60% higher from last year.

In segment wise performance, aluminium production was up 44% to 269,000 tonne on year-on-year basis as Mahan smelter achieved full ramp up during the quarter though Aditya smelter continued to be under ramp up. Despite the higher volumes, earnings from the light-weight metal tumbled to Rs 29 crore in the quarter gone by from Rs 339 crore in the corresponding period last year due to lower realisations and higher depreciation.

Copper earnings were also lower on year-on-year basis but the fall was not as steep as the one noted in aluminium. In copper, earnings before interest and taxes (EBIT) stood at Rs 350 crore, down 15% from last year at Rs 414 crore.                 

“Copper earnings took a hit because of removal of certain export incentives and significantly lower copper prices on LME (London Metal Exchange),” said the company.

During the quarter, Aditya aluminium smelter and Utkal alumina refinery project loan was refinanced leading to extension of tenure. In Aditya, the loan tenure was extended to 10.04 years from 5.83 years with last instalment payable in September 2030 as against September 2023. In Utkal, tenure period has been extended to 10.04 years from 3.97 years with last instalment payable in September 2030 as against September 2021.

With macro-economic headwinds continuing, the company’s focus will be on operational excellence and cash conservation in the coming quarters, said Hindalco Industries.