Hindalco reports second quarter FY23 results
11 November 2022
Resilient performance despite significant headwinds
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Key Highlights of Q2 FY23 (vs Q2 FY22)
- Consolidated revenue at Rs.56,176 crore, up 18 per cent YoY
- Quarterly consolidated PAT at Rs.2,205 crore, down 35 per cent YoY
- Quarterly consolidated EBITDA at Rs.5,743 crore, down 29 per cent YoY
- Novelis EBITDA per ton maintained at over $500 despite challenging headwinds
- Aluminium Upstream EBITDA at Rs.1,347 crore with EBITDA margins at 16.4 per cent
- Aluminium Downstream EBITDA at Rs.200 crore, up 163 per cent YoY; EBITDA per ton at $264, up 120 per cent YoY
- Quarterly Copper EBITDA at Rs.544 crore, up 55 per cent YoY; All-time high copper rod sales at 85 Kt, up 20 per cent YoY
- Consolidated Net Debt to EBITDA at 1.47x as of September 30, 2022 vs 1.93x as of September 30, 2021
- Hindalco recognized as the World’s Most Sustainable Aluminium Company for the third year in a row in S&P Dow Jones Sustainability Indices (DJSI) Corporate Sustainability Assessment (CSA) rankings.
*As per US GAAP
Mumbai: Hindalco Industries Limited, the Aditya Birla Group metals flagship, reported consolidated revenue of Rs.56,176 crore in Q2 FY23, an increase of 18 per cent YoY, driven by higher volumes and better realisations. The company maintained strong operational performance across all businesses. Copper Business and Aluminium Downstream reported year-on-year growth in EBITDA of 55 per cent and 163 per cent respectively, driven by better pricing and recovery in domestic demand.
Novelis delivered a solid second quarter despite challenging headwinds with revenue at $4.8 billion in Q2 FY23, an increase of 17 per cent YoY, due to recovery in demand of automotive and aerospace segments, higher pricing and favourable product mix. Novelis continued to report a quarterly EBITDA of over $500 million ($506 million in Q2 FY23, down 8 per cent YoY).
Hindalco’s Consolidated Net Profit for the second quarter stood at Rs.2,205 crore, a decrease of 35 per cent YoY, primarily due to elevated input costs and inflationary impacts.
Consolidated financial highlights for the quarter and half year ended September 30, 2022
|Q2 FY22||Q1 FY23||Q2 FY23||H1FY22||H1 FY23|
|Revenue from Operations||47,665||58,018||56,176||89,023||1,14,194|
|Earning Before Interest, Tax, Depreciation & Amortisation (EBITDA)|
|Business Segment EBITDA||7,656||8,329||6,138||14,363||14,467|
|Inter Segment (Profit)/ Loss Elimination (Net)||(52)||(66)||437||(135)||371|
|Unallocable Income/ (Expense) – (Net) & GAAP Adjustments||441||377||(832)||607||(455)|
|Depreciation & Amortisation (including impairment)||1,732||1,749||1,766||3,381||3,515|
|Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax)||–||3||2||2||5|
|Profit before Exceptional Items and Tax||5,022||6,047||3,100||9,345||9,147|
|Exceptional Income/ (Expenses) (Net)#||20||41||–||250||41|
|Profit Before Tax (After Exceptional Item)||5,042||6,088||3,100||9,595||9,188|
|Profit/ (Loss) from Continuing Operations||3,427||4,119||2,205||6,681||6,324|
|Profit/ (Loss) from Discontinued Operations||(10)||–||–||(477)||–|
|Profit/ (Loss) After Tax||3,417||4,119||2,205||6,204||6,324|
|*As per US GAAP|
Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries, said:
“Over the years, Hindalco has transitioned to a resilient and integrated business model which supports our performance and profitability even when times are challenging. Despite a surge in input costs, the company produced the highest-ever aluminium metal volumes.
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. Novelis delivered another solid quarter with higher shipments driven by a recovery in automotive and aerospace segments, and better pricing. The company maintained a strong balance sheet and robust cash flows with consolidated Net Debt to EBITDA ratio below 2 times.
Hindalco’s recognition as the World’s Most Sustainable Aluminium Company – for the third year in a row – by the S&P Dow Jones Sustainability Indices is an affirmation of our resilience and our future-ready approach to business.”
Since 2020, Hindalco has continually been ranked at the top of the aluminium sector for its sustainability-led performance. The DJSI listing takes into account Hindalco’s continual improvements in the space of decarbonisation, zero waste to landfill, zero liquid discharge, life cycle impact, biodiversity, etc. along with the company’s focus on community upliftment, Human Capital Development, and safety. Hindalco’s total score in 2022 was 83 percentage points, up from 73 in 2021. The Dow Jones Sustainability Indices is the world’s leading provider of ratings that evaluates publicly listed companies against environmental, social and governance (ESG) criteria, with a strong focus on long-term shareholder value.
Consolidated revenue for the second quarter stood at Rs.56,176 crore (vs Rs.47,665 crore), up 18 per cent YoY due to better realisations and operational efficiencies.
Hindalco reported an EBITDA of Rs.5,743 crore (vs Rs.8,045 crore) in Q2 FY23, down 29 per cent YoY, impacted by rising input costs and unfavourable macros, partially offset by better operational performance of copper and downstream businesses.
Consolidated PAT in Q2 FY23 was at Rs.2,205 crore compared to Rs.3,417 crore in Q2 FY22, a decline of 35 per cent YoY. Consolidated Net Debt to EBITDA remained strong at 1.47x on September 30, 2022 compared to 1.93x on September 30, 2021.
Business Segment Performance in Q2 FY23 (vs Q2 FY22)
Total shipments of flat rolled products (FRPs) were at 984 Kt in Q2 FY23 vs 968 Kt in Q2 FY22, up 2 per cent YoY, driven by recovery in automotive and aerospace shipments.
Novelis’ revenue in Q2 FY23 stood at $4.8 billion (vs $4.1 billion), up 17 per cent YoY, supported by higher volumes, increased product pricing, favourable mix and higher average aluminium prices.
Novelis continued to report an EBITDA of over $500 million ($506 million in Q2 FY23, down 8 per cent YoY) 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. Novelis delivered another quarter with adjusted EBITDA per ton at over $500 ($514 in Q2 FY23).
Upstream revenue was Rs.8,215 crore in Q2 FY23 vs Rs.7,421 crore in the prior year period up 11 per cent YoY supported by better realisations. Aluminium Upstream EBITDA stood at Rs.1,347 crore in Q2 FY23, compared with Rs.3,128 crore for Q2 FY22, down 57 per cent YoY, impacted by higher input costs and unfavourable macros. Upstream EBITDA margins were at 16.4 per cent and continue to be one of the best in the global industry.
Aluminium Downstream revenue was Rs.2,884 crore in Q2 FY23 vs Rs.2,549 crore in the prior year period. Sales of Downstream Aluminium stood at 95 Kt vs 86 Kt in Q2 FY22, up 11 per cent YoY.
Aluminium Downstream EBITDA stood at a record Rs.200 crore in Q2 FY23, compared with Rs.76 crore for Q2 FY22, an increase of 163 per cent YoY, primarily due to better pricing of downstream products. EBITDA per ton for Aluminium Downstream stood at $264 in Q2 FY23 vs $120 in Q2 FY22, an increase of 120 per cent YoY.
Revenue from the Copper Business was Rs.9,658 crore this quarter, up 1 per cent YoY, on account of higher volumes in Q2 FY23. EBITDA for the Copper Business was at Rs.544 crore in Q2 FY23 compared to Rs.352 crore in Q2 FY22, up 55 per cent YoY, on the back of higher domestic sales and improved by-product realisations.
Copper cathode production was at 105 Kt in Q2 FY23 (vs 100 Kt in Q2 FY22) while copper rod production was 86 Kt in Q2 FY23 (vs 70 Kt in Q2 FY22). Overall copper metal sales were at a record 112 Kt (vs 110 Kt in Q2 FY22) up 1 per cent YoY. Copper Continuous Cast Rod (CCR) sales also touched a record 85 Kt in Q2 FY23 (vs 70 Kt in Q2 FY22), up 20 per cent YoY supported by improved market conditions.
Business Updates & Recognition
- Hindalco retained its position as the World’s Most Sustainable Aluminium Company in the 2022 S&P Global Corporate Sustainability Assessment at the Dow Jones Sustainability Indices (DJSI) for a third time in a row with the highest score among 26 companies assessed in the aluminium industry.
- Novelis broke ground on new US recycling and rolling plant in Bay Minette, Alabama.
- India’s first aluminium freight rake developed by Hindalco was flagged off.
- Hindaco entered into a commercial agreement with Greenko to supply 100 MW round-the-clock carbon free power with a combination of solar, wind and hydro pump storage.
- Additional 350 Kt expansion via debottlenecking at Utkal Alumina in progress.
About Hindalco Industries Limited
Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group. A $26 billion metals powerhouse, Hindalco is the world’s largest aluminium company by revenues, and a major player in copper. It is also one of Asia’s largest producers of primary aluminium.
Guided by its purpose of building a greener, stronger, smarter world, Hindalco provides innovative solutions for a sustainable planet. Its wholly-owned subsidiary Novelis Inc. is the world’s largest producer of aluminium beverage can stock and the largest recycler of used beverage cans (UBCs).
Hindalco’s copper facility in India comprises a world-class copper smelter, downstream facilities, and a captive jetty. The copper smelter is among the world’s largest custom smelters at a single location. Hindalco’s global footprint spans 50 manufacturing units across 10 countries.
Hindalco was named the world’s most sustainable aluminium company in the Dow Jones Sustainability Indices (DJSI) in 2020, 2021 and 2022.
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Disclaimer: Statements in this “Media Release” describing the company’s objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assume no responsibility to publicly amend, modify or revise any forward-looking statement, on the basis of any subsequent development, information or events, or otherwise.