Companies

Hindalco slips into red on one-time expense

Our Bureau Mumbai | Updated on August 14, 2020

Satish Pai, Managing Director, Hindalco Industries

Company posts ₹709-cr loss in June quarter

Hindalco Industries, an Aditya Birla Group company, has reported a net loss of ₹709 crore in the June quarter against profit of ₹1,063 crore logged in the same period last year, largely due lower realisation and one-time provision.

Revenue from operations were down 16 per cent at ₹25,283 crore (₹29,972 crore). The company slipped into red despite availing deferred tax benefit of Rs 325 crore in the quarter.

Hindalco has taken a one-time provision of ₹849 crore in the quarter including a charge of ₹ 140 crore on discontinued operations at recently acquired Aleris plants at Duffel and Lewisport, while Novelis paid ₹311 crore as charity for Covid, additional expense of ₹249 crore was incurred on Aleris acquisition and provision of ₹124 crore was made for metal price lag during the quarter. In India, Hindalco paid a special Covid bonus of ₹25 crore to its employees for operating the plant during the Covid pandemic.

Hindalco has planned a capex of ₹1,500 crore while that of Novelis which had earlier planned to invest about $500 million on a standalone basis this year, has trimmed to $450 million including that of Aleris.

Satish Pai, Managing Director, Hindalco Industries, said the company had to export 80 per cent of its production as demand in India was too low but expects to cut exports to 60 per cent in September quarter with the revival in domestic sales.

“We are seeing good demand for aluminium across sectors except for auto and construction,” he said.

Pai expects the rally in aluminium prices to sustain given the optimism on economic growth revival. The demand for almost all metals in China has bounced back to pre-Covid levels while there are signs of greenshoots in the US as well, he said.

Aluminium production of Hindalco was down 11 per cent at 2.91 lakh tonne while that of value added products was dipped 57 per cent to 34,000 tonnes. Sales volume slipped five per cent to 3.03 lt while that of VAP dropped 55 per cent to 35,000 tonnes due to lockdown and weak demand. The company EBITDA from aluminium business was at ₹856 crore (₹853 crore) due to sharp spike in prices.

Published on August 14, 2020

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor