Hindalco consolidated net down on higher input cost, derivative losses

Our Bureau | | Updated on: Nov 12, 2017


Hindalco Industries, an Aditya Birla Group company, on Monday announced 37 per cent drop in consolidated net profit at Rs 2,456 crore (Rs 3,925 crore) during the financial year ended March 31, 2011.

The dip in profit was largely due to higher input cost and the Canadian subsidiary company Novelis Inc's unrealised mark-to-market derivative loss of Rs 291 crore against a gain of Rs 2,736 crore in the corresponding fiscal.

The company's consolidated sales rose 19 per cent to Rs 72,078 crore (Rs 60,708 crore) on the back of better realisation and increase in production of value-added products.

Mr D. Bhattacharya, Managing Director, Hindalco Industries, said Novelis is in the process of accounting the unrealised derivative activities into a separate hedge account so that it does not distort the true financial performance of the company. “Since Novelis operates in different countries, we had applied to different regulators of the respective countries and expect the process to be completed by FY'13,” he added.

Interest expenses rose to Rs 1,839 crore (Rs 1,104 crore) due to one-time debt issuance cost related to the refinancing of $4.8 billion at Novelis in December last year and consequent higher interest in the fourth quarter. Novelis has a debt of $4 billion while Hindalco's stands at Rs 7,000 crore as of last fiscal.

Fund raising

Hindalco plans to raise a debt of Rs 8,000 crore this fiscal for the Aditya Aluminium Smelter project of 359,000 tonnes per annum and 900 MW captive power project in Orissa. The company has tied up the equity portion for the project.

Mr Bhattacharya said that there is no repayment of debt schedule for Hindalco in next three years while Novelis' repayment is scheduled only in FY'16 by when both the companies will generate enough cash to meet their obligations comfortably.

Novelis plans to shift its focus from Europe and North America to developing economies such as South America and Asia. The company plans to invest $300 million to expand aluminium rolling capacity nearly 50 per cent to 600,000 tonnes in Pinda by 2012 due to the growing demand.

It will also enhance aluminium rolling and recycling capacity in South Korea with an investment of $400 million.

The company's shares on the BSE were down 2.33 per cent at Rs 193 on Monday.

Published on May 30, 2011
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