Hindalco Announces Q2FY 2014-15 Standalone Results

Excellent Operational performance in both Aluminium and copper business.

HindalcoHindalco

Mumbai, Maharashtra, November 16, 2014 /India PRwire/ -- Hindalco, the Aditya Birla Group flagship Company, today announced its unaudited results for the second quarter ending September 30, 2014.

Financials

Net sales stood at Rs.8,554 crore as compared to Rs. 6,305 crore in the corresponding quarter of the previous year. Profit before Interest, Depreciation and Tax (PBITDA) was Rs. 1,120 crore versus Rs 820 crores in the corresponding quarter of the previous year. Profit before Tax and exceptional items was Rs. 539 crore vis-a-vis Rs. 440 crore attained in the sequential quarter as well as in the corresponding quarter of the previous year.

Higher sales reflect increased volume and higher realisation in both aluminium and copper businesses. PBITDA for the quarter improved despite a sharp surge in the cost of coal.

Other Income was lower compared to Q2FY14 as previous year's income included certain one-timers and dividends from subsidiaries. Finance cost has increased during the quarter on progressive capitalisation of the Company's greenfield projects.

Depreciation was at Q2FY14 level, despite higher capitalisation, mainly due to the revision of useful life of certain assets in compliance with Schedule II of the Companies Act, 2013.

Exceptional Items (Net) include the following:

  • Liability provision of Rs. 563 crore towards additional levy of Rs. 295/- per MT on coal extracted by the Company from the commencement of the production of coal from Talabira I mine in FY04 up to September, 2014 in compliance with the order dated 24th September 2014 of the Hon. Supreme Court of India.
  • Provision of Rs. 258 crore towards diminution in carrying value of investment in Aditya Birla Minerals Limited, Australia, a subsidiary of the Company, arising on significant decline in value of the Company's investment therein as reflected in decline in its quoted share price over a considerable period of time.
  • Reversal of Rs. 29 crore out of the liability provided for in the previous year on account of UP Tax on Entry of Goods into Local Areas Act, 2007 (UP Entry Tax), following completion of assessment.
  • Foreign exchange gain of Rs. 361 crore in connection with receipt of Rs. 1,394 crore from A V Minerals (Netherlands) N. V., a wholly owned subsidiary of the Company, towards return of capital by reducing nominal value of shares.

Coal Mines

The Hon'ble Supreme Court of India, in its judgment dated 25.08.2014 and order dated 24.09.2014, has declared all allocations of the coal blocks made through Screening Committee route since 1993 as illegal and has quashed the allocation of 204 coal blocks. These coal blocks include Talabira-I block held and operated by the Company and three other coal blocks viz. Mahan, Tubed and Talabira II&III allocated to the Company jointly with others and were being developed by respective Joint Venture Companies established for that purpose. In case of Talabira-I coal block, the cancellation shall have effect from 31st March 2015 subject to payment of an additional levy of Rs. 295/- per MT of coal extracted since beginning till 31st March 2015.

Pursuant to the Orders of the Hon'ble Supreme Court, the Government of India has promulgated the Coal Mines (Special Provisions) Ordinance, 2014 on 21.10.2014 which inter alia provides for allocation of cancelled coal blocks by way of auction and bidding process. The Ordinance also provides for payment of compensation to prior allottees towards investments made in ''land and mine infrastructure'' for which details have already been submitted to the Ministry of Coal. The Company propose to participate in the bidding process for suitable coal blocks to meet its coal requirement in future.

Business Results

Of the total revenue of Rs. 8,554 crore, Aluminium Business contributed Rs. 3,316 crore vs. Rs. 2,343 crore in Q2FY14. The higher Revenue is attributable to higher volume and higher realization. As a result, the segment results of Aluminium Business also improved from Rs. 166 crore in Q2FY14 to Rs. 339 crore in Q2FY15 despite higher coal cost.

In the Copper Business, revenue moved up to Rs. 5,247 crore from Rs. 3,974 crore in Q2FY14. The performance of the Copper Business reflected enhanced volume, better TcRc and improved by-product credit. The segment results soared from Rs. 239 crore in Q2FY14 to Rs. 414 crore in Q2FY15.

Sequentially, compared to Q1FY15, both segments have posted improved results.

Operational Review

Aluminium

Metal production was up substantially to 187 Kt vs. 140 Kt in Q2FY14, consequent to the ongoing ramp-up at Mahan Smelter. It was at the same level as Q1FY15 since smelting operations at Aditya Aluminium and at Hirakud Smelter, both in Odisha were affected by natural calamities, in the early part of the current quarter. Restoration activities in these facilities are almost complete now.

Alumina production(including Utkal) increased by 41% to 531 Kt over Q2FY14.The standalone results do not include performance of Utkal Alumina refinery, as it is a subsidiary of the Company.

Copper

Cathode production was higher at 96 Kt as against 77 Kt in Q2FY14.

To sum up, with additional capacity coming on stream in Aluminium business, the Company will further consolidate its leadership position and is well-poised to benefit from the expected upturn in the economy.

Notes to Editor

An industry leader in aluminium and copper, Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is amongst the largest single location custom smelter globally.


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