Hindalco reports lower net profit of Rs248 crore for Q4-FY’14

Hindalco Industries Limited, the flagship company of the Aditya Birla Group, has reported a lower net (after tax) profit of Rs248 crore for fiscal fourth quarter ended 31 March 2014, mainly on account of exceptional items.

Net sales in Q4 of FY'14 were up 16 per cent over the previous quarter (Q3-FY'14) mainly on the back of the highest ever aluminium sales volume and higher copper sales tonnage in its copper business, the company said.

Profit before interest and depreciation increased by 27 per cent over Q3-FY'14.

The company is faced with a Rs468 crore writedown on account of a disputed entry tax imposed by the state governments of Uttar Pradesh and Madhya Pradesh, according to a statement released by the company.

Other income of the company stood unchanged from levels in the previous quarter. However, with capitalisation of some assets at Mahan Aluminium and Aditya Aluminium projects, Hindalco said depreciation and interest charge increased by around Rs100 crore in the fourth quarter of the 2013-14 financial year compared to the previous quarter of the year.

''An exceptional item of Rs396 crore relates to a liability of Rs324 crore under the UP Tax on Entry of Goods into Local Areas Act, 2007 (UP Entry Tax) and a Liability of Rs72 crore under the Madhya Pradesh Gramin Avsanrachna Tatha Sarak Vikas Adhiniyam (MPGATSVA). Both these levies have been contested by the company and appeals against these are pending before the Supreme Court,'' the company stated in a release issued on Friday.

Profit before exceptional item and tax was higher by 28 per cent over Q3 of FY'14. Net profit after tax at Rs248 crore was lower mainly on account of exceptional items, the company said.

Aluminium sales grew 22 per cent sequentially during the fourth quarter on the back of higher volumes while pre-tax profit doubled to Rs350 crore compared with Q3 of FY'14.

Aluminium production in Q4 of FY'14 rose to 175 kt following the ramping up of capacity at Mahan. Copper cathode production in Q4 of FY'14 was also higher at 96 kt compared to levels in the previous quarter.

There has been an all-round improvement in performance in volumes and results in both the businesses, the company stated.

For the year ended 31 March 2014, net profit was lower at Rs1,413 crore.

Hindalco reported a 7 per cent growth in net sales and a 13 per cent increase in profit before depreciation, interest and tax. Interest costs went up significantly consequent to higher borrowing and capitalisation of some assets at projects.

Consolidated net profit of the company was also lower at Rs2,175 crore, because of higher interest and depreciation and exceptional items, Hindalco stated.

Consolidated revenue as well as profit before depreciation, interest and taxes increased by 9 per cent and 5 per cent, respectively, in comparison with last year's corresponding figures.

Novelis, a wholly-owned subsidiary of Hindalco, reported an increase in shipments of flat rolled products from 2,786 kt in fiscal 2013 to 2,895 kt in fiscal 2014.

''The recent rolling expansion in Pindamonhangaba (Pinda) facility, coupled with the strong demand in Brazil, contributed to the higher shipments and strong operating results in South America,'' Hindalco said.

Shipments were also up in Europe in fiscal 2014 compared to fiscal 2013, driven by higher automotive and can product shipments. The recent rolling expansion project in South Korea contributed to the higher shipment levels in Asia region. Shipments in North America were down compared to the prior year, as can product shipments were lower, it added.

Aditya Birla Minerals Limited, a 51 per cent subsidiary of the group in Australia, reported a net loss of A$0.2 million in FY14 compared to loss of A$8.3 million in FY13.

''Mount Gordon mines operations is currently placed under care and maintenance and various strategic options are being evaluated including divestment. Nifty mines is currently under suspension post development of a sink hole on March 20, 2014,'' the release stated.

The board of directors of the company has recommended dividend of Re1 per share aggregating to Rs242 crore (including dividend distribution tax of Rs35 crore) for the year ended 31 March 2014.