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BW Businessworld

Showing Off Mettle

Hindalco delivered a strong consolidated performance in FY2019-20, reflecting its resilience to withstand market cycles.

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Hindalco reported a consolidated ebitda of Rs 15,536 crore on a turnover of Rs 1,18,144 crore in FY2019-20. Hindalco’s aluminium and copper business in India, and Novelis continued to deliver steady operational performance, despite lower LME (London Metal Exchange) prices and tough market conditions. The major enablers were lower input prices and better cost efficiencies. Hindalco (including Utkal) continued to achieve record aluminium production levels at 1.314 MT and alumina production at 2.735 MT in FY2019-20. Utkal Alumina also registered its best ever production in FY20. All plants operated at their designed capacities.

Production of aluminium value-added products (excluding wire rods) stood at 319 KT in FY20 reflecting a flattish y-o-y growth and Hindalco’s focus on strengthening its downstream portfolio so as to become further delinked from LME volatility. In the copper business, cathode production was 321 KT, which was lower compared to the year earlier on account of loss of production due to lockdown and plant shutdown in March 2020. Continuous cast rod production was at a record high of 263 KT, up 7 per cent year on year because of continuous ramp-up of the CCR#3 plant at Dahej.

Hindalco’s acquisition of Aleris Corporation in April 2020, through its subsidiary Novelis Inc., has cemented the company’s position as the world’s largest flat-rolled products player and recycler of aluminium. Hindalco’s state-of-art copper facility comprises a world-class copper smelter and a fertiliser plant along with a captive jetty. The copper smelter is among Asia’s largest custom smelters at a single location.

In India, the company’s aluminium units across the country engage in the entire gamut of operations from bauxite mining, alumina refining, coal mining, captive power plants and aluminium smelting to downstream rolling, extrusions and foils. Today, Hindalco ranks among the global aluminium majors as an integrated producer and has a footprint in 9 countries outside India.

VOLATILE YEAR: The metals industry, and particularly the aluminium and copper sectors, faced a volatile and challenging year in fiscal 2019-20. The subdued growth in CY2019 was a result of rising trade barriers, uncertainty surrounding trade and geopolitics and region-specific structural factors. The impact of Covid-19 on global growth since March 2020 has further depressed the economic outlook for the year ahead.

Hindalco delivered a strong consolidated performance in FY2019-20, reflecting its resilience to withstand market cycles. The spirited show was driven by a continued record performance from Novelis, coupled with stable performance of the Indian aluminium and copper businesses.

According to Kumar Mangalam Birla, Chairman, Hindalco Industries, “Over the last decade, Hindalco has transformed itself from a company that was heavily dependent on the volatility of the LME to one that is a portfolio of stable and value-added earnings today. It has consistently delivered to its stated commitment of size, scale, operational excellence and profitable growth. This journey has been punctuated by some bold bets and many patient investments. Novelis, which was acquired more than a decade ago, was one such bet. It was viewed with skepticism by many in the investor community then but has today in fact established itself as one of the best large acquisitions overseas by any Indian corporate.” Birla believes that a crisis of such magnitude is a great reminder of their responsibility to give back to society.

“True to its legacy, Aditya Birla Group has curated a multi-pronged approach to help our communities fight Covid-19, with a commitment of over Rs 500 crore towards Covid relief measures. This entailed a contribution of Rs 400 crore to the PMCARES Fund,” he adds.