Hindalco reports third quarter FY23 results
09 February 2023
Q3 FY23 Performance (vs Q3 FY22)
- Consolidated revenue at Rs.53,151 crore, up 6 per cent YoY
- Quarterly consolidated PAT at Rs.1,362 crore, down 63 per cent YoY
- Quarterly consolidated EBITDA at Rs.3,930 crore, down 48 per cent YoY
- Record total shipments of India primary aluminium at 349Kt (vs 345Kt) up 1 per cent YoY
- Aluminium Upstream EBITDA at Rs.1,591 crore with EBITDA margins at 19.8 per cent
- Aluminium Downstream EBITDA at Rs.157 crore, up 24 per cent YoY; EBITDA per ton at $210, up 7 per cent YoY
- Quarterly Copper EBITDA at Rs.546 crore, up 40 per cent YoY; All-time high copper rod sales at 88 Kt, up 24 per cent YoY
- Novelis Adjusted EBITDA* at $341 million ($506 million) down 33 per cent YoY
- Consolidated Net Debt to EBITDA at 1.60x as of December 31, 2022 vs 1.62x as of December 31, 2021
- Hindalco in S&P Global Sustainability Yearbook 2023 for the second consecutive year
*As per US GAAP
Mumbai : Hindalco Industries Limited, the Aditya Birla Group metals flagship, reported consolidated revenue of Rs.53,151 crore in Q3 FY23, an increase of 6 per cent YoY, driven by higher volumes and steady operational performance across India operations. Copper Business and Aluminium Downstream reported year-on-year growth in EBITDA of 40 per cent and 24 per cent respectively, driven by better pricing and recovery in domestic demand.
Novelis delivered a resilient third quarter despite challenging headwinds with revenue at $4.2 billion in Q3 FY23, down 3 per cent YoY, driven by lower average aluminium prices and lower shipments.
Hindalco’s Consolidated Net Profit for the third quarter stood at Rs.1,362 crore, a decrease of 63 per cent YoY, primarily due to elevated input costs, unfavourable macros and inflationary impacts.
Consolidated Financial Highlights for the Quarter and Nine Months ended December 31, 2022
|Particulars||Q3 FY22||Q2 FY23||Q3 FY23||9MFY22||9MFY23|
|Revenue from Operations||50,272||56,176||53,151||1,39,295||1,67,345|
|Earning Before Interest, Tax, Depreciation & Amortisation (EBITDA)|
|Business Segment EBITDA||7,618||6,138||5,142||21,981||19,609|
|InterSegment Profit/ (Loss) Elimination (Net)||(110)||437||101||(245)||472|
|Unallocable Income/ (Expense) – (Net) & GAAP Adjustments||116||(832)||(1,313)||723||(1,768)|
|Depreciation & Amortisation (including impairment)||1,742||1,766||1,784||5,123||5,299|
|Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax)||3||2||2||5||7|
|Profit before Exceptional Items and Tax||5,033||3,100||1,214||14,378||10,361|
|Exceptional Income/ (Expenses) (Net)||165||–||–||415||41|
|Profit Before Tax (After Exceptional Item)||5,198||3,100||1,214||14,793||10,402|
|Profit/ (Loss) from Continuing Operations||3,660||2,205||1,362||10,341||7,686|
|Profit/ (Loss) from Discontinued Operations||15||–||–||(462)||–|
|Profit/ (Loss) After Tax||3,675||2,205||1,362||9,879||7,686|
*As per US GAAP
Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries, said:
“We are seeing core industries worldwide being buffeted by macro-economic and inflationary cost pressures, yet we delivered a strong operational performance with higher volumes across India business segments.
Though the India Aluminium upstream business EBITDA came under pressure from the surge in input costs and lower realisations, this was partially offset by higher volumes. The India Aluminium downstream business segment delivered a higher EBITDA YoY, due to higher volumes and better pricing. The Copper business registered a 40 per cent growth in EBITDA driven by higher volumes and better realisations, supported by a robust domestic demand. Novelis witnessed unprecedented inflationary pressures, unfavourable foreign exchange rates and lower shipments; this was partially offset by higher pricing and a favourable product mix.
Despite the hits of this quarter due to external factors, we believe the long-term story remains positive backed by our strong balance sheet and resilient business model.”
Consolidated revenue for the third quarter stood at Rs.53,151 crore (vs Rs.50,272 crore), up 6 per cent YoY due to better realisations and better volumes in India operations.
Hindalco reported an EBITDA of Rs.3,930 crore (vs Rs.7,624 crore) in Q3 FY23, down 48 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 Q3 FY23 was at Rs.1,362 crore compared to Rs.675 crore in Q3 FY22, a decline of 63 per cent YoY. Consolidated Net Debt to EBITDA remained strong at 1.60x on December 31, 2022 compared to 1.62x on December 31, 2021.
Business Segment Performance in Q3 FY23 (vs Q3 FY22)
Total shipments of flat rolled products (FRPs) were at 908 Kt in Q3 FY23 vs 930 Kt in Q3 FY22, down 2 per cent YoY, on account of inventory reduction by can customers, partially offset by higher shipments of automotive and aerospace products.
Novelis’ revenue in Q3 FY23 stood at $4.2 billion (vs $4.3 billion), down 3 per cent YoY, driven by lower average aluminium prices and lower shipments in Q3 FY23.
Novelis reported an EBITDA of $341 million ($506 million in Q3 FY22, down 33 per cent YoY) primarily due to lower shipments, higher inflationary pressures, less favourable metal benefits from recycling, unfavourable foreign exchange, partially offset by higher pricing, higher cost pass through to customers and a favourable product mix. Novelis’ adjusted EBITDA per ton stood at $376 in Q3 FY23 (vs $544 in Q3 FY22).
Upstream revenue was Rs.8,046 crore in Q3 FY23 vs Rs.8,019 crore in the prior year period. Aluminium Upstream EBITDA stood at Rs.1,591 crore in Q3 FY23, compared with Rs.3,309crore for Q3 FY22, down 52 per cent YoY, impacted by higher input costs and unfavourable macros. Upstream EBITDA margins were at 19.8 per cent and continue to be one of the best in the global industry.
Aluminium Downstream revenue was Rs.2,647 crore in Q3 FY23 vs Rs.2,885 crore in the prior year period. Sales of Downstream Aluminium stood at 91 Kt vs 86 Kt in Q3 FY22, up 6 per cent YoY.
Aluminium Downstream EBITDA stood at a record Rs.157 crore in Q3 FY23, compared with Rs.127 crore for Q3 FY22, an increase of 24 per cent YoY, primarily due to better pricing of downstream products. EBITDA per ton for Aluminium Downstream stood at $210 in Q3FY23 vs $196 in Q3 FY22, an increase of 7 per cent YoY.
Revenue from the Copper Business was Rs.10,309 crore this quarter, up 1 per cent YoY, on account of higher volumes in Q3 FY23. EBITDA for the Copper Business was at Rs.546 crore in Q3 FY23 compared to Rs.390 crore in Q3 FY22, up 40 per cent YoY, on the back of stable operations, higher volumes of CC rods, better TC/RCs and realisations.
Copper cathode production was at 104 Kt in Q3 FY23 (vs 102 Kt in Q3 FY22) while copper rod production was 91 Kt in Q3 FY23 (vs 77 Kt in Q3 FY22). Overall copper metal sales were at a 109 Kt (vs 110 Kt in Q3 FY22). Copper Continuous Cast Rod (CCR) sales also touched a record 88 Kt in Q3 FY23 (vs 71 Kt in Q3 FY22), up 24 per cent YoY supported by improved market conditions.
Business updates and recognition
- Pilot production begins at Hindalco’s new 34Kt Extrusions facility in Silvassa, India.
- Additional 350 Kt expansion via debottlenecking at Utkal Alumina in progress.
- Hindalco part of S&P Global Sustainability Yearbook 2023 for the second consecutive year.
- Utkal Alumina conferred the FICCI CSR Award in the category of ‘Food Security & Agriculture’.
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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