Novelis Record Financial Performance Shines Amid Dim Results For Hindalco In FY ‘20’s First Quarter

Novelis Record Financial Performance Shines Amid Dim Results For Hindalco In FY ‘20’s First Quarter

Indian metals firm Hindalco reported results for the first quarter of fiscal year 2020 last week. Though the market presented the firm a challenge in the quarter, Hindalco says stable operational performance carried it through.

In the first quarter Hindalco’s consolidated EBITDA fell by 13 percent, from ₹4,335 crore last year to ₹3,770 crore this year. Consolidated profit before tax and exceptional items dropped to ₹1,578 crore, falling from ₹2,275 crore on the year. Consolidated profit after tax also lagged in the quarter, falling from ₹1,475 crore last year to ₹1,063 crore in the just-ended quarter, a decline of 28 percent.

Hindalco’s subsidary Novelis reported an 11-percent rise in adjusted EBITDA on the year to a record US$372 million, pushing adjusted EBITDA per ton up by 7 percent over the prior year to a record of US$448. Net income less special items in the quarter rose 26 percent on the year, from US$115 million last year to US$145 million. Hindalco credits the strong quarter to increased shipments and a favorable price and product mix.

The firm’s aluminium segment (including Utkal Alumina) smelted 326 thousand metric tons of aluminium and refined 686 thousand metric tons of alumina in the just-ended quarter. The segment reported a revenue in the quarter of ₹5,472 crore, off by 3 percent on the year. EBITDA in the quarter fell from ₹1,532 crore last year to ₹889 crore in the just-ended quarter. Hindalco blamed lower realizations in the quarter for the drop in sector profitability.

“We continued to maintain our strong position in aluminium and copper in Q1 FY20 despite headwinds,” said Hindalco’s Managing Director Satish Pai in a press release. “The resilient performance owes as much to our backward integration, resource security, strong balance sheet, operational capabilities and rich product portfolio. Today, 79 per cent of Hindalco’s consolidated EBITDA is non-LME linked, reflecting a balanced and sustainable business model, which will serve us well in all market conditions.”