Hindalco misses expectations to reports standalone loss in Q1 at Rs 40 crore

Aluminium major Hindalco Industries has started off the financial year 2020-21 with a net loss of Rs 40 crore on a standalone basis for June quarter as revenue was hit by COVID-19-led lockdown.

The company had reported profit at Rs 23 crore for June quarter 2019.

Standalone revenue in Q1 FY21 declined 26.2 percent to Rs 7,420 crore compared to the same period last year.

"Copper cathode production in Q1 FY21 was impacted by disruptions in operations due to COVID-19, leading to lower production at 41 Kt, down 46 percent. Total copper metal sales were lower by 29 percent at 58 Kt and copper value added product (CC Rods) sales were down 51 percent to 31Kt, impacted by lower domestic demand," said Hindalco in its BSE filing.

Revenue from the copper business stood at Rs 3,031 crore in Q1 FY21 down by 34 percent due to lower volumes and realisation of both copper and by-products. The company's EBITDA in Q1 FY21 fell significantly to Rs 37 crore against Rs 307 crore in the corresponding quarter last year.

Aluminium segment's revenue fell 19 percent YoY to Rs 4,436 crore in June quarter 2020 due to lower aluminium prices, but EBITDA grew by 0.4 percent to Rs 856 crore in the same period despite macro uncertainties amid COVID-19.

"All smelters and major refineries continued to operate during the lockdown. Enhanced thrust on fixed cost reduction, better operational efficiencies and lower input costs led to a reduction in the cost of production of aluminium metal in Q1 FY21," said the company.

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On the operating front, its standalone earnings before interest, tax, depreciation and amortisation (EBITDA) was down 20.2 percent YoY at Rs 573 crore, but margin climbed 60 bps YoY to 7.7 percent in Q1 FY21.

Hindalco has reported av one-time loss at Rs 35 crore under exceptional item owing to the exgratia amount paid to the employees for their contribution during COVID-19 pandemic.

Numbers were below analysts' expectations. The standalone loss was estimated at Rs 19 crore for the quarter on revenue of Rs 10,055 crore and EBITDA was expected at Rs 695 crore with margin at 9.1 percent, according to the average of estimates of analysts polled by CNBC-TV18.

Consolidated net loss of the company stood at Rs 709 crore for the quarter, against a profit of Rs 1,063 crore in the corresponding period of last year. Revenue fell 15.6 percent during the quarter to Rs 25,283 crore compared to the year-ago period.

Consolidated EBITDA plunged 37.4 percent to Rs 2,359 crore with Novelis' EBITDA coming at Rs 1,919 crore down 25.8 percent YoY for the quarter.