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Aditya Birla Nuvo reports results for the quarter ended 30th September 2011

11th November, 2011

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Click here to view the quarterly investor presentation

  • Revenue grew by 18 per cent from Rs.4,533 crore to Rs.5,342 crore
  • EBITDA rose by 25 per cent from Rs.621 crore to Rs.779 crore

Rs. crore
Quarter 2 Consolidated results Half year
  2011-12 2010-11   2011-12 2010-11  
18% 5,342 4,533
Revenue
10,109 8,390 20%
25% 779 621
EBITDA
1,587 1,177 45%
  214 105*
Net profit
467 254*  
*After one-time exceptional loss of Rs.104 crore borne during last year by Aditya Birla Money and Aditya Birla Money Mart, subsidiaries of Aditya Birla Nuvo, on account of certain trades of their clients.

Management Comments

Dr. Rakesh Jain, Managing Director, said, "Aditya Birla Nuvo has strengthened its leadership position in financial services, telecom and fashion and lifestyle businesses. It has posted strong earnings even amidst the challenges of prevailing macro-economic environment that affected few businesses. This only reflects the strength of its conglomerate model."

Mr. Sushil Agarwal, Whole Time Director and CFO, said, "Aditya Birla Nuvo continues to generate strong cash flows, despite earnings pressure in some of the businesses. Standalone balance sheet and financial ratios continue to remain sound."


Business-wise Review:

A) Financial Services

Aditya Birla Financial Services (ABFS) continues to augment its market position as a significant non-bank financial services player. While the Life Insurance and Asset Management businesses improved their rankings, the Non Banking Financial Company (NBFC) scaled its book size and diversified its portfolio. Currently, ABFS has Assets Under Management (AUM) of Rs.88,300 crore.

During the quarter, ABFS posted a consolidated revenue of Rs.1,680 crore, a growth of 4 per cent over the previous year. It displayed a strong growth in profitability. Earnings before tax more than doubled from Rs.62 crore to Rs.138 crore. The business-wise highlights follow:

 

  • Birla Sun Life Insurance (BSLI):
    • BSLI improved its ranking to 4th among the private sector players. Its market share rose from 7.6 per cent to 8.7 per cent.
    • In September 2011, new business premium of BSLI achieved year-on-year growth of 58 per cent.
    • During the quarter, earnings before tax of BSLI surged from Rs.20 crore to Rs.97 crore. Bottom-line growth was driven by the growing in-force book, balanced product mix and better expense management.
    • The gross premium income of BSLI grew year-on-year by 6 per cent to Rs.1,533 crore.
      • Driven by good persistency, the renewal premium of BSLI rose by 21 per cent to Rs.1,055 crore.
      • The 13th month premium persistency ratio stood at 82 per cent as on 30th September 2011.
      • During the quarter, new business premium income de-grew from Rs.580 crore to Rs.479 crore. However, in September 2011, it grew from Rs.145 crore to Rs.232 crore.
      • Non-ULIP portfolio has been strengthened. It has contributed to 44 per cent of the individual new business as compared to 8 per cent in the second quarter of the previous year.
    • No capital infusion was required as internal accruals adequately met additional solvency requirement.
  • Birla Sun Life Asset Management (BSAMC):
    • BSAMC moved one step up to rank 4th with a market share of 9 per cent.
    • Market share in domestic equity average AUM increased quarter-on-quarter to 5.4 per cent.
    • The total average AUM of BSAMC stood at Rs.67,897 crore.
    • BSAMC posted revenue of Rs.78 crore and earnings before tax of Rs.20 crore.
    • Its real estate fund of Rs.1,088 crore has invested about 20 per cent of the fund size.
  • Aditya Birla Finance (ABFL):
    • ABFL, the NBFC arm, diversified its portfolio adding infra financing, which contributed to the bolstering of its book size.
    • The closing book size rose year-on-year by 24 per cent to around Rs.2,500 crore.
    • Revenue grew from Rs.32 crore to Rs.73 crore.
    • Earnings before tax more than doubled to Rs.25 crore.
    • Having strengthened the management team, ABFL is focusing on growing profitably its book while managing risk optimally.
  • Aditya Birla Private Equity (ABPE):
    • Of Rs.881 crore commitment received in ABPE Fund I, approximately 40 per cent has been deployed.
    • The second fund 'Sunrise Fund' has received commitments of about Rs.225 crore (Including 10 per cent sponsor commitment) on its first closing. An investment has been made for about 10 per cent of fund size. 

B) Telecom:

  • Idea continued to gain revenue market share. It stands enhanced at 13.9 per cent (Q1FY12) up from 13 per cent a year ago.
  • Having crossed the 100 million subscribers base and with the highest active subscribers' ratio in the industry, Idea has built a strong platform for future growth.
  • Revenue grew by 27 per cent to Rs.4,608 crore and EBITDA rose by 30 per cent to Rs.1,159 crore.
  • Strong growth in total minutes on the network drove year-on-year earnings growth.
  • Net profit de-grew from Rs.180 crore to Rs.106 crore. With the introduction of 3G services this year, additional expenses of amortisation of 3G spectrum fee and charging of related interest cost has impacted the bottom line.

C) Fashion & Lifestyle:

  • Madura Fashion & Lifestyle achieved 24 per cent year-on-year growth in revenue at Rs.594 crore supported by 28 per cent volume growth.
  • The retail channel attained an overall 39 per cent sales growth led by a 15 per cent like-to-like stores sales growth and retail space expansion.
  • Madura continued to scale up its retail presence to strengthen its leadership position. It launched 90 Exclusive Brand Outlets (EBOs) during the quarter (160 in the half year) to reach 1,021 EBOs spanning across 1.5 million square feet.
  • EBITDA grew by 28 per cent to Rs. 58 crore driven by sales growth across the channels and brands viz., Louis Philippe, Van Heusen, Allen Solly and Peter England.

D) IT-ITeS:

  • Aditya Birla Minacs has sold Total Contract Value (TCV) of US$243 million and won 12 new clients during the first six months.
  • Revenue expanded year-on-year by 19 per cent to Rs.481 crore supported by conversion of order book and forex movement.
  • EBITDA before one-off items remained flat at Rs.42 crore as slower ramp up in new contracts constrained margins.
  • Aditya Birla Nuvo has acquired 11.72 per cent holding in Aditya Birla Minacs. The IT and ITeS subsidiaries have been merged and Aditya Birla Nuvo holds 99.71 per cent in the merged entity.

E) Manufacturing:

  • During the quarter, revenue grew by 25 per cent to Rs.1,469 crore. Revenue growth was driven by higher linen fabric volumes, higher agri-products trading and increased realisation in Carbon Black, Rayon, Textiles and Agri-business reflecting pass on of rise in production costs.
  • EBITDA de-grew by 7 per cent to Rs.191 crore. Lower volumes and rise in production costs strained profitability in the Carbon Black and Insulators businesses. Textiles and Agri-business contributed to the earnings.

About Aditya Birla Nuvo Ltd.

Aditya Birla Nuvo is a US$4 billion conglomerate. Over the years, it has made successful ventures into the sunrise sectors viz., Financial Services (Life Insurance, Asset Management, NBFC, Private Equity, Broking, Wealth Management and general insurance advisory), Telecom, Fashion and Lifestyle and IT-ITeS. Its razor sharp focus on manufacturing businesses has made it a leading player in Agri-business, Carbon Black, Insulators, Rayon and Textiles sectors.

Aditya Birla Nuvo is part of the Aditya Birla Group, a US$35 billion Indian multinational. The group operates in 33 countries across the globe, is anchored by an extraordinary force of 133,000 employees belonging to 42 nationalities and derives more than 60 per cent of its revenue from its overseas operations.

Vision
To become a premium conglomerate with market leadership across businesses, delivering superior value to shareholders on a sustained basis.

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 Rs.one crore. The financial results are consolidated financials unless otherwise specified.