Hindalco reported fourth quarter and fiscal year 2016 results. In quarterly standalone results revenues for the quarter were lower by 8 percent due to a sharp decline in aluminium and copper realizations.
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The average LME prices (USD) for aluminium and copper were lower by 16 percent and 20 percent respectively as compared with the previous year. In aluminium business the impact was much severe due to a sharp fall in the local market premium, which declined by around 75 percent; and a sharp surge in imports of aluminium in the country.
However, a strong increase in aluminium volumes following the increased production and our thrust on value addition across businesses helped us partially offset the impact of sharp fall in realizations.
The weaker Rupee also enabled partially offset the impact of the drop in realizations. The lower cost of raw materials, especially energy inputs was a major relief during the quarter.
The YOY quarterly Profit before Interest, Tax, Depreciation and amortization (PBITDA) at Rs.1,371 crore was higher by 27 percent. This reflects a robust operational performance in the face of severe macro- economic headwinds.
Depreciation and finance cost were up 30 percent, given the progressive capitalization of Greenfield projects. These charges rose by Rs.212 crore over Rs.704 crore charged in Q4 FY15.
Despite higher interest and depreciation charges, the PBT for the quarter (before exceptional items) at Rs.455 crore was 22 percent higher than that in the corresponding quarter of the previous year due to strong operational gains. The net profit for Q4 FY16 at Rs.356 crore, was 123 percent higher vis a vis Q4 FY15, the latter was impacted by certain one timers (Rs.146 cr).
Sequentially, compared to Q3FY16, revenues from operations were higher by 6 percent, primarily due to increased volumes and improved product mix. Higher aluminium realizations on account of marginally better LME and weaker rupee also contributed to this increase.
The reported PBITDA was higher by 49 percent as compared with Q3 FY16 while net profit soared to Rs.356 crore as compared to Rs.40 crore in Q3 FY16. This improvement was primarily on the back of higher volumes, aided by improved realizations.
The cost pressures abetted significantly on account of lower energy costs, especially coal and this saw us deliver a strong performance. Progressive stabilization of new factories contributed to better efficiencies and hence improved performance.
Annual standalone results
For the year ended March 31, 2016, the company’s revenue at Rs.34,318 crore were broadly stable at FY15 level notwithstanding the sharp fall in both aluminium and copper realizations.
The steep fall in copper revenues was offset by increased revenues from aluminium business. The aluminium higher revenues were achieved primarily on the back of higher volumes and improved product mix despite a sharp decline in realizations.
Profit before Interest, Tax, Depreciation and Amortisation (PBITDA) for the year was marginally higher by 2 percent. This reflects a robust operational performance in a challenging year, when average realizations were much lower. PBIDTA was also augmented by higher other income.
As anticipated, depreciation and finance cost increased by Rs.1,178 crore over FY15 following progressive capitalization of the projects. The PBT during FY16 (before exceptional items) was lower by 60 percent at Rs.733 crore. Net profit for the year at Rs.607 crore was lower by 34 percent as compared with that delivered in FY15. ■