Net Profit (Reported)
Less: Exceptional Gain2
Net Profit (Like-to-Like)
Aditya Birla Nuvo reports results for the quarter ended 31st December, 2016
Posted by: Clara Fernandes at 2/14/2017 04:25:00 am
Note 1: The Company has adopted Indian Accounting Standards (Ind AS) w.e.f. 1st April 2016. The financials for the previous year are also Ind AS compliant. The above financials have been reviewed by the Audit Committee and taken on record at the Board meeting of the Company held on 14th February 2017.
Note 2: Reported Net Profit in the previous year includes exceptional gain of ` 355 Crore pertaining to cessation of Pantaloons Fashion & Retail Ltd. as subsidiary of ABNL.
Note 3: Telecom, Asset Management, Payments Bank and Solar businesses have been consolidated based on equity accounting as per Ind AS.
New Delhi, 14th February 2017: Aditya Birla Nuvo Limited (ABNL) (BSE: 500303, NSE: ABIRLANUVO, Bloomberg: ABNL IN) has reported a consolidated revenue of ` 3,388 Crore for the quarter ended 31st December 2016, up by 8% over the previous year. EBITDA surged by 22% to ` 955 Crore driven by Financial Services business. Net profit at ` 206 Crore de-grew year-on-year due to the reduction of ABNL’s share in Idea’s net profit by ` 242 Crore. Net profit of Idea Cellular has been impacted due to free voice and mobile data services by the new entrant in the sector coupled with higher interest and amortisation costs.
Highlights of the results:
Aditya Birla Financial Services
Aditya Birla Financial Services is one of the largest non-bank financial services players and ranks among the top 5 fund managers in India (excluding LIC). Its assets under management (AUM) rose by 24% to ` 229,500 Crore. Its quarterly revenue grew by 27% to ` 2,417 Crore and earnings before tax by 19% to ` 278 Crore.
Aditya Birla Finance Ltd. (ABFL) ranks among the top 7 private NBFCs in India (excluding housing finance companies). Its lending book has expanded by 34% to ` 29,852 Crore, ahead of the competition. ABFL has created a well diversified portfolio. The quality of portfolio remains sound with gross NPA at 0.69% and net NPA at 0.33%. It reported a healthy average Return on Equity at 16.6% per annum and average Return on Asset at 2.23% per annum. Led by equity infusion and strong internal accruals, its net worth has risen by 50% to ` 4,238 Crore.
Aditya Birla Housing Finance Ltd., has extended its loan book from ` 1,232 Crore in December 2015 to ` 3,235 Crore in December 2016. Its net worth has gone up to ` 375 Crore. The business has turned profitable within 7 quarters of full operations.
Birla Sun Life Insurance ranks 4th among the private players in India. The new business premium market share is at 7.7%. It remained the number 1 private life insurer in the Group segment with a 27.0% share. During the quarter, its individual new business premium rose by 61% and the total new business doubled year-on-year.
Birla Sun Life Asset Management registered 27% year-on-year growth in its quarterly average AUM (AAUM) at ` 194,927 Crore. Its position as India’s 4th largest asset management company stands strengthened with an improved market share of 10.68%. The strong focus on scaling up retail and high margin assets continued, with its domestic equity AAUM expanding by 33% to ` 43,440 Crore and PMS AAUM more than doubling to ` 2,746 Crore.
Aditya Birla Insurance Brokers enhanced its market share from 1.86% to 2.30% led by a 69% rise in premium placement while general insurance industry’s premium rose by 36%.
Aditya Birla Health Insurance Co. Ltd. launched its operations with a differentiated business model to catalyze expansion of Health Insurance market in India. It will have a multi-channel distribution model across agency, broking, bancassurance, direct marketing, online channel etc. The agency channel commenced with 9 branches across 7 cities, it will expand its reach further in the next couple of years.
Aditya Birla Money MyUniverse, India’s number 1 online personal finance management portal, enjoys the trust of more than 3.2 million registered users who are managing over ` 20,000 Crore through this portal.
Telecom (Idea Cellular)
Idea Cellular ranks 3rd in India with an improved revenue market share of 18.7% up from 18.5% a year ago. Having a base of 192 million active subscribers, Idea is the 6th largest cellular operator in the world in terms of subscribers, based on operations in a single country. Idea’s quarterly consolidated revenue de-grew by 4% to ` 8,663 Crore and EBITDA declined sharply by 24% to ` 2,166 Crore, impacted by the free offerings by the new entrant along with minor effects of demonetisation. Idea remains committed to building world class mobile broadband services and is targeting to offer Pan India wireless broadband services (3G / 4G) by March - April 2017 in all of its 22 service areas from the existing 17 service areas.
ABNL’s divisions are India’s leading manufacturers of linen, urea, viscose filament yarn (VFY) and insulators. Their combined quarterly revenue at ` 1,217 Crore was lower year-on-year by 15% due to the pass through of reduction in natural gas prices in the Agri business, coupled with lower volumes in the Textiles and the Insulators businesses. The quarterly EBITDA at ` 128 Crore was lower year-on-year by 33%. Return on average Capital Employed, during these nine months, remained healthy at 19% per annum.
Demonetisation led to temporary liquidity shortage in the trade channel as well as downstream players in the Textiles and Agri value chain. EBITDA of Indian Rayon de-grew from ` 65 Crore to ` 55 Crore on account of lower volumes in Viscose Filament Yarn and caustic soda. Indo-Gulf fertilizers reported an EBITDA of ` 51 Crore vis-à-vis ` 63 Crore in the previous year. Constrained by sluggish demand, EBITDA of Jaya Shree textiles fell from ` 35 Crore to ` 9 Crore while EBITDA of Aditya Birla Insulators declined from ` 27 Crore to ` 12 Crore.
Payments Bank: ABNL had incorporated ‘Aditya Birla Idea Payments Bank Ltd.’ in Joint venture with Idea Cellular in February 2016. The senior management team is in place and is planning to launch payments bank services by the first half of the calendar year 2017, after obtaining the requisite approvals from RBI.
Solar Power: The business is in the process of setting up 60 MW solar power capacity in Karnataka. The commissioning of the plants is targeted by the first quarter of FY2017-18. The business has received infusion of about ` 60 Crore as equity contribution from the JV partners for funding of the project.
Standalone Balance Sheet
The proceeds of ` 1,664 Crore from the sale of 23% stake in Birla Sun Life Insurance and realisation of fertilisers subsidy has led to reduction in the Standalone Net Debt from ` 3,935 Crore in March 2016 to ` 2,190 Crore in December 2016. Net Debt to EBITDA stood at 2.6 times and Net Debt to Equity at 0.22 times. ABNL has realised the fertilisers subsidy of ` 115 Crore in January 2017.
The Board has approved the Dividend Distribution Policy for the company as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The objective of this policy is to provide the dividend distribution framework to the stakeholders of the company.
For 2016-17, ABNL has planned a capex of about ` 300 Crore for its divisions including towards the expansion of Linen Yarn and VFY capacities. Besides, there will be a capital requirement to the tune of about ` 900 Crore in the Financial Services businesses. During the nine months period, the Company has invested ` 182 Crore as capital expenditure for divisions and ` 482 Crore as capital infusion in the Financial Services businesses.
Composite Scheme of Arrangement for amalgamation of ABNL with Grasim
Post receipt of the approvals from the stock exchanges and the Competition Commission of India, application has been filed with National Company Law Tribunal. The transaction is expected to be completed by the first half of fiscal 2017-18.
About Aditya Birla Nuvo Ltd.
Aditya Birla Nuvo is a USD 3.6 billion conglomerate with leadership position across its businesses. Its Financial Services business (including NBFC, Housing Finance, Life Insurance, Asset Management, Health Insurance, General Insurance Advisory, Private Equity, Broking, Wealth Management and Online Money Management) ranks among the top 5 fund managers in India. Its Telecom venture, Idea Cellular, ranks among the top 3 cellular operators in India. It is a leading player in Linen, Agri, Rayon and Insulators businesses. ABNL has recently ventured into the Solar Power businesses. It has also received an in-principle approval from RBI to set up a Payments Bank in joint venture with Idea Cellular.
Aditya Birla Nuvo is a part of the Aditya Birla Group, a USD 41 billion Indian multinational. The Aditya Birla Group is in the league of Fortune 500. Anchored by an extraordinary force of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group operates in 36 countries across the globe. About 50 per cent of its revenues flow from its overseas operations.