Hindalco Industries has reported a 10 per cent drop in net profit in the fourth quarter due to drop in aluminium prices and spurt in input cost.
The company intends to raise Rs 2,165 crore through allotment of 15 crore warrants on a preferential basis to the promoters.
Each warrant will be converted into one equity share at Rs 144.35 within 18 months from the date of allotment. Promoters holding in the company will increase by about five per cent to 36.99 per cent from 32.06 per cent on conversion of these warrants.
The company has already received about Rs 540 crore from the promoters.
It recently raised Rs 3,000 crore through issue of 10-year 9.55 per cent secured non-convertible debentures.
Though aluminium sales increased 13 per cent to Rs 2,499 crore, EBIT (earnings before interest and tax) was down nine per cent at Rs 484 crore (Rs 562 crore). Aluminium prices on the London Metal Exchange were down 23 per cent at $2,047 a tonne in the March quarter from $2,663 a tonne in the same period last year.
Mr D. Bhattacharya, Managing Director, said the impact of cost pressure was moderated by rupee depreciation against dollar. Rupee had fallen to Rs 50.28 a dollar in the March quarter from Rs 45.27 recorded in the same period last year.
“There has been a significant increase in costs, especially in the case of coal which was up 20 per cent, furnace oil went up by 40 per cent, caustic soda rose 25 per cent and carbon prices jumped 30 per cent. Impact of the cost increase was partly offset by asset-sweating and improved operational efficiency,” he said.
The company's alumina production was marginally up at 345,000 tonnes (344,000 tonnes), while aluminium output rose four per cent to 144,000 tonnes (139,000 tonnes). The value added downstream sales grew 12 per cent over last year.
Revenue from copper business was up 11 per cent at Rs 5,154 crore (Rs 4,637 crore) due to better product mix and by-product sales.
Earnings before interest and tax were up 43 per cent at Rs 293 crore from Rs 206 crore on the back of improved treatment and refining charges (TcRc).
“We expect our focus on operational efficiency and asset sweating to see us through the cost pressure this fiscal. With Utkal Aluminium project going on stream by end of this year, we expect additional pressure from interest and depreciation relating to the project,” said Mr Bhattacharya.
Hindalco's subsidiary Novelis's results are expected on May 22. The company's shares on the BSE were up 1.16 per cent at Rs 117 on Tuesday.