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Hindalco reports 35% decline in profit on elevated input costs

Hindalco reports 35% decline in profit on elevated input costs

Hindalco reports 35% decline in profit on elevated input costs
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By Nigel D'Souza   | Hormaz Fatakia  Nov 11, 2022 2:20:46 PM IST (Updated)

The company's revenue came at Rs 56,176 crore, up 18 percent from the year-ago period, driven by higher volumes and better realisations.

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The Aditya Birla Group company, Hindalco Industries on Friday reported a 35 percent decline year-on-year in profit after tax at Rs 2,205 crore, primarily due to elevated input costs and inflationary impacts. The company's revenue came at Rs 56,176 crore, up 18 percent from the year-ago period, driven by higher volumes and better realisations.
A CNBC-TV18 poll had expected the company's net profit to decline as much as 70 percent from last year along with weakness in operating performance.
The company's copper business and aluminium downstream reported year-on-year growth in EBITDA of 55 percent and 163 percent respectively, driven by better pricing and recovery in domestic demand.
Company's wholly-owned subsidiary Novelis reported a revenue at $4.8 billion in quarter under review, an increase of 17 percent from the year-ago period, due to recovery in demand of automotive and aerospace segments, supported by higher volumes, increased product pricing, favourable mix and higher average aluminium prices.
Novelis' total shipments of flat rolled products were at 984 Kt in the second quarter against 968 Kt in the year-ago period, up two period year-on-year, driven by recovery in automotive and aerospace shipments.
Novelis reported an EBITDA of over $500 million in spite of higher inflationary pressures and other operating costs and an unfavourable foreign exchange translation, partially offset by higher product pricing, higher volumes and favourable product mix.
In September, the profits of Novelis declined due to cost pressures. Quarterly sales increased to $4,799 million from $4,119 million. Novelis was likely to see cost headwinds of $75-125/tonne on EBITDA/tonne as there has been steep and persistent inflation in energy prices, and the freight while supply chain issues have led to higher costs.
Satish Pai, Managing Director, Hindalco Industries, said: “While the Upstream Aluminium Business EBITDA was impacted due to elevated raw material and energy costs, our aluminium Downstream Business performed well with EBITDA more than doubling YoY due to better pricing and market demand. The Copper Business outperformed, reporting its highest ever metal and copper rod sales.”
The company reported an EBITDA of Rs 5,743 crore in the quarter, down 29 percent from the corresponding period in the previous year, impacted by rising input costs and unfavourable macros, partially offset by better operational performance of copper and downstream businesses. The overall EBITDA was expected to come at Rs 1,850 crore.
Aluminium upstream revenue came at Rs 8,215 crore in the quarter, up 11 percent from Rs 7,421 crore in preceding year supported by better realisations. The EBITDA stood at Rs 1,347 crore in the second quarter, down 57 percent impacted by higher input costs and unfavourable macros.
Aluminium downstream revenue was at Rs 2,884 crore in the second quarter vs Rs 2,549 crore in the previous year.
Revenue from the copper business stood at Rs 9,658 crore this quarter, up one percent year-on-year, on account of higher volumes in the second quarter. EBITDA for the copper business was at Rs 544 crore, up 55 percent from Rs 352 crore in the preceding year, on the back of higher domestic sales and
improved by-product realizations.
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