Hindalco Industries, the country's largest aluminium producer, reported on Friday a lower-than-expected net profit of Rs 289.51 crore in the June quarter as a provision of Rs 104 crore, made following recent Supreme Court judgement in a matter pertaining to mining regulations, weighed on the bottom line. On a year-on-year basis, it was down 2 per cent.
In the period under review, top line of Aditya Birla Group company rose 27 per cent on year-on-year basis to Rs 10,663 crore as higher sales and better realisation in aluminium coupled with higher volumes and stronger LME copper realisations lent firm support to the revenue stream.
“The overall demand from user industries remained subdued due to apprehensions of the GST roll out. However, with the smooth implementation of GST, in the long-run the economy is expected to grow at a faster pace,” said the company release.
Revenues from aluminium business were up nine percent on a year-on-year basis at Rs 5,008 crore, while that of copper jumped 51 per cent in the quarter gone by to Rs 5,403 crore as against the corresponding period last year. Improved coal security also helped aluminium business to garner better EBITDA. The company saw its coal security improve further with new coal linkages of 2.9 million tonnes in Q1 FY18.
“Higher level of aluminium and copper imports and an increase in domestic aluminium production continue to impact domestic sales volumes. Hindalco remains focussed on accelerated deleveraging, operational excellence, higher value addition, customer centricity and cash conservation to deliver stake holder value,” said the release.
The company's Earnings Before Interest, Taxes, Depreciation and Ammortisation (EBITDA) stood at Rs 1,404 crore in the June quarter with aluminium business contributing Rs 875 crore and balance by copper.
In the alumina segment, EBITDA of Utkal Alumina, the lowest cost producer globally, increased 207 percent to Rs 291 crore on the back of higher realisation. The refinery produced 384 kilotonnes of alumina in the June quarter, up three per cent from last year.
According to Bloomberg estimates, Hindalco's revenue was seen at Rs 12, 078 crores in the June quarter, while net profit was expected to be at Rs 586 crore.
The company has also prepaid a portion of its loans with to-date total prepayment standing at Rs 5,399 crore in FY18, said Hindalco in its release.
Reacting to the lower-than-expected performance, shares of Hindalco Industries fell 7 percent from the previous close to Rs 222 on the BSE today.