Hindalco fourth quarter profit falls 37% to ₹236 cr
Aditya Birla Group flagship firm Hindalco Industries on Thursday reported a 37.4% decline in stand-alone profit to ₹235.82 crore for the quarter ended March 31. The company had posted a stand-alone profit of ₹376.97 crore in the year-ago period, Hindalco Industries said in a filing to BSE.
However, the company’s stand-alone income during January-March quarter increased to ₹12,733.23 crore, over ₹11,892.06 crore a year ago.
Hindalco Industries Ltd is a global major in aluminium and copper.
In the statement, the company said, “PAT (profit after tax) for Q4 FY19 stood at ₹506 crore (₹616 crore in Q4 FY18), primarily due to weaker macros and higher input costs in the last quarter.” The consolidated profit for FY19 fell to ₹5,495.01 crore, over ₹6,082.87 crore in the year ended March 31, 2018.
Hindalco Industries managing director Satish Pai said, “Our FY19 consolidated profits reached an all-time high in spite of a difficult business environment. This resilient performance reflects the strength of our integrated business model, excellent operational capabilities, stable operations and our enriched product portfolio.
Novelis’ innovative products and customer-centric approach helped it deliver its best-ever performance. In India, our increased focus on downstream is already showing encouraging results with record aluminium valueadded product volumes this year. In copper, too, the share of valueadded products (copper rods) has risen, helping the business maintain profitability despite lower volumes,” he said.
He said the company expects the impetus provided by India’s growth to boost demand for aluminium.
“Rising imports of aluminium and copper, however, pose a threat and we look forward to suitable steps to provide a levelplaying field,” he added.
Shares of the company closed up 1.55% at ₹193.60 apiece on BSE on Thursday.
Meanwhile, despite the European Commission suspending the deadline to clear Novelis’ takeover of Aleris, Hindalco Industries, the Indian parent of Novelis, is confident that the acquisition will be completed on schedule.
In an interview on Thursday, Pai said: “I don’t think we should be too perturbed by the ‘stopping of the clock’ by the EC. It’s a fairly routine procedure, we’re fairly certain they will restart the clock again. We are not deviating from our stance that we will complete the regulatory requirements by Q2. We will respond to the EC’s questions in the next three to four days.”
“Europe is not where we expect anti-trust issues,” Pai said. “Aleris in Europe is in the aerospace business. It has one auto plant in Duffel which is about 60 kilo tonnes and there are five other suppliers of auto sheet in the European Union (EU). In fact, the EU has excess supply of automotive sheet.”
“It’s in the US where we are working on the anti-trust more closely and the process is ongoing. A decision will have to be made by the Department of Justice by June. We remain confident that we will complete all regulatory approvals by Q2 of this financial year,” Pai added.
Hindalco announced last July that its US unit Novelis would buy Aleris at an enterprise value of $2.58 billion. A deal would make Hindalco the world’s second largest aluminium producer.
In March this year, EU antitrust regulators said they have started a probe into Novelis’ plan to buy Aleris.
On Tuesday, the European Commission “stopped the clock” on the probe, a process that is set in place when the parties concerned fail to provide timely information to the body.
HINDALCO INDUSTRIES IS CONFIDENT THAT THE NOVELIS-ALERIS DEAL WILL BE COMPLETED ON SCHEDULE, DESPITE THE EC ROADBLOCK