Hindalco Industries, an Aditya Birla Group company, has reported that its net profit was down 43 per cent in the March quarter at ₹668 crore against ₹1,178 crore logged in the same period last year, largely due to lower sales and higher finance cost.

Revenue from operations was down at ₹29,318 crore (₹33,745 crore) due to lower demand. Hindalco’s finance cost has gone up to ₹1,429 crore (₹975 crore).

The company has announced a dividend of ₹1 a share.

Aluminium metal production was up two per cent at 327,000 tonnes against 321,000 tonnes while sales were down three per cent to 314,000 tonnes (325,000 tonnes) and aluminium value added product (excluding wire rods) sales dipped 8 per cent to 76,000 tonnes (83,000 tonnes) due to lock down.

The company has cut the capital expenditure to ₹1,500 crore for this fiscal against ₹2,300 crore spent last year.

Satish Pai, Managing Director, Hindalco Industries, said the company will continue to focus on conserving cash even while finishing projects that are about 60-70 per cent complete.

For instance, he said the Utkal Alumina expansion by 500,000 tonnes, which is about 70 per cent through, will be completed by next March instead of this December.

On the increase in finance cost, Pai said Novelis had raised $1.6 billion at 4.75 per cent to pre-close bonds worth $1.5 billion carrying interest of 6.25 per cent. When a bond is closed early there are certain cost and in this case it was about $70 million (₹568 crore). The entire process will lead to a saving of $15 million a year, he said.

The net debt was at ₹18,595 crore against ₹15,600 crore in December quarter while the gross debt was at ₹25,485 crore (₹22,000 crore). It does not plan to pre-pay debt this year.

The company also plans to delay the ₹2,500-crore downstream project in Hirakud and take a call on setting up a scrap melting furnace by second half of this year.

Covid impact

On the impact of Covid, the company said its four aluminium smelters and the Utkal alumina refinery operated at near full capacity during the lockdown while the coal and bauxite mines also operated at regular scale. More than 80 per cent of the output was exported to minimise inventory build-up and to absorb plant fixed costs.

However, aluminium downstream plants was shut initially, except for two that served essential sector customers. Downstream operations have resumed at reduced capacity to meet existing market demand, it said.

Related Topics
comment COMMENT NOW