Hindalco, the flagship company of the Aditya Birla Group, on Tuesday reported a sharp drop in consolidated profits for the year ended March 2009.
The company announced a net profit of Rs 485 crore in 2008-09, down 77 per cent from Rs 2,193 crore a year earlier. In 2008-09, revenues were at Rs 65,625 crore, compared to Rs 60,013 crore last year, a rise of 9.35 per cent.
“The drop in profits happened due to an unprecedented drop in aluminium prices on the benchmark London Metal Exchange in the past year, which saw prices plummet from $3,000 per tonne to a low of $1254 per tonne,” said Debu Bhattacharya, managing director, Hindalco.
In order to stabilise the company’s future growth plans and acquisitions, Hindalco is embarking on a scheme of financial restructuring. It has created a “business reconstruction reserve”, a separate account has been created with Rs 8,647 crore, which has been adjusted with the company’s accounts.
Hindalco also announced plans of raising equity through a qualified institutional placement issue of $500 million (Rs 2,394 crore). The proceeds would be used for the expansion plans for its new Greenfield and Brownfield projects, said Sunirmal Talukdar, chief financial officer, Hindalco.