Hindalco Industries, an Aditya Birla Group company, has reported a 60 per cent fall in September quarter net profit at ₹387 crore against ₹974 crore logged in the same period last year, largely due to loss of ₹1,398 crore booked on its overseas deal to sell part of Aleris asset.

Revenue from operation was up five per cent at ₹31,237 crore (₹29,657 crore) on the back of higher realisation, lower production cost and increase in output.

In the June quarter, the company had registered a loss of ₹709 crore and revenue of ₹25,283 crore.

Satish Pai, Managing Director, Hindalco Industries, said the company is disappointed with the US Department of Justice decision not to extend the deadline for selling Lewisport asset of Aleris and was forced to complete the deal despite the Covid pandemic.

Initially, he said there were 10-15 buyers for Lewisport but many backed out after the Covid pandemic and the company was forced to sell the asset to the only interested private equity bidder American Industrial Partner for $171 million. The fair value of the asset was estimated at $348 million.

Following this, Hindalco has taken a charge of ₹1,398 crore in the September quarter.

Liberty House deal

Similarly, in the deal to sell Duffel plant to Indian born British businessman Sanjeev Gupta-owned Liberty House for $310 million, Hindalco has received $210 million and has entered into negotiation with the buyers to recover the remaining $100 million. It could take 1-2 years to recover the money, he added.

However, Pai said despite the financial set backs, the benefit from the operational synergy between Aleris and Novelis could increase to $180 million from the earlier estimate of $150 million even as benefit of $38 million was achieved in last seven months of integrated operations.

Both aluminium and copper demand has bounced back to the pre-Covid level on the back of strong demand recovery in domestic and international markets. However, Pai said the production cost may move with increase in coal and furnace oil prices.

Hindalco expects production at Chakla coal mine in Jharkhand to start in three years and feed the captive power plants at Renukoot in Uttar Pradesh and Sambalpur in Odisha. The mine has reserves of 450-500 million tonnes and was won with the commitment of 14.5 per cent revenue share.

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