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Aditya Birla Nuvo reports results for the quarter ended 30 June 2014

12th August, 2014

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Aditya Birla Nuvo reports results for the quarter ended 30 June 2014

  • Revenue grew by 8 per cent to Rs. 6,207 crore
  • EBITDA is up by 8 per cent to Rs. 1,273 crore

Rs. crore
Consolidated results Quarter 1
  2013-14
(Previous year)
2014-15
(Current year)
 
Revenue
5,744 6,207 8%
EBITDA
1,174 1,273 8%
Normalised Net Profit (Excluding IT-ITeS business and before one-off items)1
237 300 27%
Reported Net Profit
331 264  

Note1: In Q1 last year, profit is higher by Rs.65 crore on account of gain on slump sale of Carbon Black Business (including net tax credit of Rs.41 crore). In Q1FY15, profit is lower by Rs.36 crore on account of net loss of Rs.23 crore from operations of Minacs for the period from 1 April 2014 to 8 May 2014 and exceptional loss of Rs.13 crore pertaining to the divestment of Minacs. This loss is without considering deferred grant of Rs.42 crore receivable over the next 3 years, which will be accounted for on actual receipt basis.


Excluding the IT-ITeS Business, which was divested with effect from 9 May 2014, the revenue of Aditya Birla Nuvo Limited (ABNL) rose year on year by 16 per cent and net profit (before one-off items) is up by 27 per cent.

Business-wise review
Aditya Birla Financial Services
Aditya Birla Financial Services (ABFS) ranks among the top five fund managers (excluding LIC) in India. Its funds under management grew by 21 per cent to US$22.4 billion (Rs.134,216 crore). Its consolidated revenue at Rs.1,655 crore registered a 21 per cent growth. It posted earnings before tax of Rs.220 crore. ABFS gained market share across its Life Insurance, Asset Management, Broking and General Insurance Advisory Businesses. Growth in its lending book continues to be robust. The business portfolio of ABFS stands augmented with the license for housing finance business granted.

Among the private life insurers, new business premium market share of Birla Sun Life Insurance (BSLI) is up from 6.7 per cent to 9.5 per cent and its ranking improved from 7 to 5 led by strong growth in the group business. BSLI reported its embedded value at Rs.3,225 crore and value of new business margin at 16.2 per cent for 2013-14.

Birla Sun Life Asset Management (BSAMC) cemented its position as the fourth largest player in India with an improved market share of 9.98 per cent up from 9.42 per cent a year ago. In terms of domestic equity AUM, BSAMC moved two places up to rank fifth. Its AUM crossed the Rs.100,000 crore mark. The lending book of Aditya Birla Finance expanded by 50 per cent to about Rs.12,600 crore. The broking and the wealth management businesses turned profitable with improvement in market sentiment coupled with cost control initiatives.

Fashion & Lifestyle
The company's Fashion & Lifestyle Business continued to expand its customer reach, strengthening its leadership position. During the quarter, 66 stores were opened to reach 1,791 exclusive brand outlets/stores, spanning nationwide across 4.4 million square feet. Its revenue rose by 18 per cent to Rs.1,528 crore and EBITDA by 53 per cent to Rs.109 crore led by revenue growth and margin expansion across formats. Madura achieved all round growth in earnings. Its revenue surged by 23 per cent to Rs.787 crore and EBITDA soared by 66 per cent to Rs.62 crore. EBITDA margin stands expanded by 200 basis points. The revenue of Pantaloons grew by 12 per cent to Rs.386 crore. Led by execution of portfolio strategy and improved merchandising, gross margin expanded by over 300 basis points. The annualisation impact of business building costs and higher accelerated depreciation on account of stores refurbishment strained its bottom-line. Pantaloons is raising capital through rights issue to fund its growth capital requirements. Jaya Shree attained its highest ever quarterly earnings led by expansion in linen segment. To strengthen its market leadership, it is further expanding its linen yarn capacity from 3,400 to 6,400 tonnes per annum.

Telecom
Idea ranks as the sixth largest cellular operator in the world, in terms of subscribers based on operations in a single country. In India, it ranks third with an improved revenue market share at 16.6 per cent up from 15.7 per cent a year ago. It posted a strong growth in earnings led by robust voice and data usage, improved voice realisation, scale benefit and cost efficiency. Its revenue grew by 16 per cent to Rs.7,555 crore and EBITDA rose by 20 per cent to Rs.2,545 crore. With net debt to EBITDA at 1.54 times, its balance sheet remained strong. The cash profit generation of Rs.20.2 billion and equity infusion of Rs.3,000 crore raised in June 2014 through the QIP were the contributors. In July 2014, Idea raised Rs.750 crore through the issue of equity shares on preferential basis to Axiata.

Manufacturing (Agri, Rayon and Insulators)
The revenue from the manufacturing businesses at Rs.863 crore grew by 10 per cent and EBITDA at Rs.88 crore is up by 4 per cent. In the Agri Business, profitability is higher led by energy savings despite the plant shutdown for 15 days. In the Rayon Business, the new superfine unit is running at full capacity and contributing to the bottom-line. Earnings were partly offset by lower caustic soda volumes owing to the maintenance shutdown. The Insulators Business was impacted by disruption/suspension of work for 42 days at Rishra plant due to labour unrest. The plant resumed operations on 18 June 2014.

Going forward
For fiscal 2014-15, ABNL has earmarked a capital expenditure plan of around Rs.500 crore. The company plans to invest about Rs.350 crore in the Financial Services Business besides subscribing to the rights issue of Pantaloons. The cash flow from operations and proceeds from the divestment of Minacs will support the growth plans of ABNL.

About Aditya Birla Nuvo Ltd.

Aditya Birla Nuvo is a ~US$4 billion conglomerate operating in the services and the manufacturing sectors, where it commands a leadership position. Its service sector businesses include Financial Services (Life Insurance, Asset Management, NBFC, Private Equity, Broking, Wealth Management and general insurance advisory), Fashion & Lifestyle (Branded apparels & Textiles) and Telecom. Its manufacturing businesses comprise of the Agri, Rayon and Insulators Businesses.
Aditya Birla Nuvo is part of the Aditya Birla Group, a US$40 billion Indian multinational. The Group operates in 36 countries across the globe, is anchored by an extraordinary force of about 120,000 employees belonging to 42 nationalities and derives more than 50 per cent of its revenue from its overseas operations.

Disclaimer : Certain statements in this “Press Release” may not be based on historical information or facts and may be “forward looking statements” within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans & strategy of the Company, its future outlook & growth prospects, future developments in its businesses, its competitive & regulatory environment and management's current views & assumptions which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise. This “Press Release” does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the Company’s shares. The financial figures in this “Press Release” have been rounded off to the nearest rupees one crore. The financial results are consolidated financials unless otherwise specified.