Hindalco gains after Novelis declares Q4 results

Hindalco Industries rose 4.68% to Rs 147.70 at 10:40 IST on BSE after the company's US subsidiary Novelis reported its Q4 results on Friday, 16 May 2014.

Meanwhile, the BSE Sensex was up 63.52 points, or 0.26%, to 24,185.26.

On BSE, so far 4.95 lakh shares were traded in the counter, compared with an average volume of 9.79 lakh shares in the past one quarter.

The stock hit a high of Rs 148.75 and a low of Rs 141.60 so far during the day. The stock hit a 52-week high of Rs 149.70 on 13 May 2014. The stock hit a 52-week low of Rs 83.05 on 7 August 2013.

The stock had underperformed the market over the past one month till 16 May 2014, rising 4.25% compared with 8.28% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 41.10% as against Sensex's 18.44% rise.

The large-cap company has an equity capital of Rs 206.46 crore. Face value per share is Re 1.

Novelis, the world leader in aluminum rolling and recycling, said net profit declined 8.47% to $54 million on 1.96% increase in net sales to $2549 million in Q4 March 2014 over Q4 March 2013.

Net profit declined 48.51% to $104 million on 0.46% decline in net sales to $9767 million in the year ended March 2014 over the year ended March 2013.

The company reported shipments of aluminum rolled products of 753 kilotonnes in the fourth quarter of fiscal 2014, up 8% compared to the prior year. Every global operating region reported an increase in shipments year-over-year. Higher global shipments were the primary driver behind the 4% increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) versus the prior year to $250 million in the fourth quarter of fiscal 2014.

Adjusted EBITDA for fiscal 2014 was $885 million compared to $961 million reported for the prior year. The decline was primarily due to pricing pressures experienced in the Asian and North American beverage can markets, a higher fixed cost base due to expansions ahead of revenue generation and higher incentive costs, partially offset by higher shipments and benefits from increasing recycled content.

Shipments of aluminum rolled products totaled 2,895 kilotonnes in fiscal 2014, an increase of 4% compared to 2,786 kilotonnes reported in fiscal 2013. Net sales in fiscal 2014 were $9.8 billion, which is flat compared to the prior year resulting from higher shipments partially offset by a 10% decrease in average aluminum prices and lower conversion premiums.

Novelis reported negative free cash flow of $16 million for the year. "Our excellent cash generation essentially funded the $717 million in capital investments we made last year," said Steve Fisher, Chief Financial Officer for Novelis. "In addition, we drove liquidity levels in excess of $1 billion by fiscal year end, allowing us to return $250 million of capital to our parent company in the first quarter of fiscal 2015."

Novelis Inc. is the global leader in aluminum rolled products and the world's largest recycler of aluminum. The company operates in 9 countries, has approximately 11,400 employees and reported revenue of approximately $10 billion for its 2014 fiscal year. Novelis supplies premium aluminum sheet and foil products to transportation, packaging, construction, industrial and consumer electronics markets throughout North America, Europe, Asia and South America. The company is part of the Aditya Birla Group.

Hindalco Industries' net profit declined 23% to Rs 333.98 crore on 4% growth in total income to Rs 7477.28 crore in Q3 December 2013 over Q3 December 2012. The company will announce Q4 results on 29 May 2014.

Hindalco Industries is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the world's largest custom smelter at a single location.