Aditya Birla Nuvo reports financial performance for the quarter ended 30 June 2010
30th July, 2010
Aditya Birla Nuvo's focus on strategic objectives across the businesses continues to drive robust growth in its earnings.
- Consolidated Revenue grew by 18%
- Consolidated EBITDA surged by 66%
- Consolidated Net profit improved significantly to Rs149 crore
|Net Profit / (Loss)
Financial services business led the top-line as well as the bottom-line growth. Fashion & lifestyle (branded apparels and accessories) and manufacturing businesses also contributed significantly to the earnings.
Business-wise performance review:Aditya Birla Financial Services (ABFS)
ABFS continues to take rapid strides in line with its vision "to be a leader and role model in the financial services sector with a broad based and integrated business". Its combined assets under management (AUM) grew by 19% to Rs83,633 crore (approx. USD 19 billion). Revenue surged by 23% to Rs1,277 crore. ABFS posted net profit (including life insurance) of Rs54 crore vis-a-vis loss of Rs100 crore in the corresponding quarter of the preceding year.
- The total premium income of Birla Sun Life Insurance (BSLI) grew by 18% to Rs1,143 crore. New business premium at Rs473 crore is up by 7% while renewal premium rose by 27% to Rs669 crore. AUM scaled up by 44% to Rs16,841 crore. Driven by the growing size of in-force book, BSLI achieved net profit of Rs9 crore vis-a-vis net loss of Rs111 crore.
The Embedded Value (EV) of BSLI at Rs3,816 crore as on 31 March 2010, grew year on year by 25%. EV reflects the value of future profits embedded in the in-force policies written by the life insurance company. The Value of New Business (VNB) margin, a measure used for gauging the profitability of new business stood at 22.5% for FY2009-10 vis-a-vis 20.3% in FY2008-09.
- The total average AUM (incl. offshore and PMS) of Birla Sun Life Asset Management (BSAMC) at Rs65,911 crore recorded 13% growth over the last year. Its average equity AUM is up by 42% to Rs13,904 crore compared to 20% industry growth. Domestic equity net sales of BSAMC at Rs425 crore placed it among the top three equity mobilisers while the industry witnessed net redemption to the tune of ~ Rs1,425 crore. Its net profit grew multifold to Rs32 crore.
ABFS continues to lay thrust on building alternate assets. After garnering ~USD 200 million through its private equity arm, it has launched Real Estate Onshore fund through its asset management arm.
Telecom: Idea Cellular continued to build sustainable competitiveness while maintaining growth momentum. Idea ranks 3rd in terms of wireless revenue market share. This stands enhanced from 11.7% to 12.6% during financial year 2009-10 amidst hyper competition (Based on gross revenue for UAS & Mobile license only, as released by TRAI). Idea won 3G spectrum in 11 service areas which account for ~80% of its existing revenue. Revenue soared by 23% to Rs3,650 crore led by a strong growth in minutes of usage. Cash profit sustained at Rs779 crore even after absorbing the competitive pressure on average realised rate per minute and start up costs of seven new service areas launched in past one year. Its net profit de-grew from Rs297 crore to Rs201 crore.
IT-ITeS: Aditya Birla Minacs continued to augment its capabilities and build strong order book with a focus on the bottom-line. To strengthen its presence in the US debt collection market (an industry size of USD 13 billion), Aditya Birla Minacs has acquired 'Bureau of Collection Recovery' (BCR), a US based leading accounts receivable management company. It has built an additional USD 134 million (total contract value) order book during the quarter. EBITDA soared by 65% to Rs36 crore.
Fashion & Lifestyle: The business is capitalising on brand leadership and enhancing channel productivity to achieve profitable growth. Revenue at Rs348 crore witnessed a robust 37% growth. This was driven by improved footfalls and 30% like to like stores sales growth in the retail channel. EBITDA at Rs19 crore grew considerably vis-a-vis a loss of Rs25 crore in the previous year.
In the manufacturing businesses, the focus is on capturing the sector growth and realising full potential. Collectively, revenue at Rs970 crore registered 23% growth and EBITDA at Rs172 crore posted 37% growth over the last year. The operating margin at 18% and return on average capital employed at 25% has been encouraging. The carbon black, agri-business, insulators and textiles businesses were the major contributors to the earnings growth.
The ~85,000 metric tons per annum (MTPA) Greenfield Carbon Black capacity expansion at Patalganga was completed in May 2010 end. It is currently under stabilisation. This has increased the total carbon black manufacturing capacity to ~315,000 MTPA. The company is planning to further augment its capacity by 85,000 MTPA each at Patalganga in the second phase as well as in southern India.Management comments
Commenting on the results, Dr. Rakesh Jain, MD, Aditya Birla Nuvo emphasised, "The strong presence of Aditya Birla Nuvo in the financial services, telecom, IT-ITeS, fashion & lifestyle and manufacturing sectors makes it a large eco-system which is uniquely positioned to capitalise on growth opportunities available across the wide spectrum of the Indian Economy."
Mr. Sushil Agarwal, CFO, Aditya Birla Nuvo said, "Given the thrust on profitable growth and guided by distinct strategies, all our businesses continue to perform well and contribute to the earnings growth. We remain confident of creating value for all the stakeholders by capturing the growth potential in all our businesses."
About Aditya Birla Nuvo Ltd.
Aditya Birla Nuvo is a USD 3.5 billion conglomerate. Over the years, it has built successful ventures into sunrise sectors viz., financial services (life insurance, asset management, NBFC, private equity, broking, wealth management etc), telecom, IT-ITeS and fashion & lifestyle. The razor sharp focus on manufacturing businesses has made it a leading player in carbon black, agri-business, rayon, insulators and textiles businesses.
Aditya Birla Nuvo is a part of the Aditya Birla Group, India's first truly multinational group. The group operates in 26 countries, is anchored by an extraordinary force of over 130,000 employees belonging to 40 nationalities and derives more than 60% of its revenue from its overseas operations.
To become a premium conglomerate with market leadership across businesses,
delivering superior value to shareholders on a sustained basis.
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