Slide 1: HEG Limited Q2 & H1 FY2012 Results Presentation
HEG Limited Q2 & H1 FY2012 Results Presentation
Slide 2: Introduction
Introduction Leading manufacturer and exporter of graphite electrodes in India One of the lowest cost producers of graphite electrodes Strong presence in value added Ultra High Power (UHP) segment Diversified customer portfolio - POSCO, US Steel, Arcelor Mittal and Nucor Corp Graphite electrodes man
Slide 3: Sector Perspective
Sector Perspective Steel Industry data for CY shows significant growth 9M CY2011 world crude steel production higher by 9.7% as compared to 9MCY2010 (Source: World Steel Association) 2011 and 2012 expected to witness strong rise in steel demand 2011 world steel demand expected to increase 5.9%; 2012
Slide 4: Performance Perspectives
Performance Perspectives Q2 FY2012 reflects constrained operational performance Operating performance got muted on account of; Increased cost of domestic inputs Adverse forex movement on working capital borrowings Annual capacity utilization at high level and expected to maintain a high rate Growing
Slide 5: Performance Perspectives
Performance Perspectives Operational highlights Assured supply of Needle coke continues for CY 2011 Adequate power supply for 80,000 tons graphite electrodes production level 2 thermal power plants of total ~63.5 MW benefit from coal linkages ~ 13.5 MW Hydel-power plant operations provide low-cost p
Slide 6: Performance Perspectives
Performance Perspectives Buy Back of Equity Shares Buy-back of fully paid equity shares at a price not exceeding Rs. 350 per share, announced in Q4 FY2011 Total buyback not to exceed Rs. 67.5 crore being 9.95% of total paid up capital and free reserves as on March 31, 2010 Last date for buyback – Ma
Slide 7: Highlights
Highlights Net Sales in Q2 FY2012 at ` 319.2 crore as compared to ` 299.6 crore in Q2 FY2011 EBIDTA at ` 44.2 crore in Q2 FY2012 from ` 55.2 crore in Q2 FY2011 before exceptional items EBIT at ` 33.9 crore in Q2 FY2012 from ` 46.1 crore in Q2 FY2011 before exceptional items EBT at ` 14.6 crore in Q2
Slide 8: Expansions – Graphite Electrodes
Expansions – Graphite Electrodes Phase I of capacity expansion from 66,000 TPA to 80,000 TPA which commenced in March, 2010 is operational Full capacity commercial production is expected to be operational by Q3 FY2012 Expansion anchored by revival in demand growth of graphite electrodes due to highe
Slide 9: Management views
Management views Commenting on the results, Mr. Ravi Jhunjhunwala, Chairman and Managing Director, HEG Limited, said: “ I am glad to share that HEG is poised to reap the fruits of its expansion program. The second phase of the 80,000 will be fully operationalized in the coming quarter, consolidating
Slide 10: Management views
Management views Commenting on the results, Mr. Manvinder Singh Ajmani, Chief Financial Officer, HEG Limited, said: “ I am pleased to share that our expansion to 80,000 tonnes is nearing completion. Our operating performance has got moderated on account of increasing cost of domestic inputs. Meanwhi
Slide 11: Financial performance – A review
Financial performance – A review Revenues: Net Revenues stood at ` 319.2 crore in Q2 FY2012 as compared to ` 299.6 crore in Q2 FY2011 Volumes expected to maintain momentum. Particulars (` crore) Q2 FY2012 Q2 FY2011 Shift (%) H1 FY2012 H1 FY2011 Shift (%) Net Revenues: 319.2 299.6 6.5 598.7 521.8 14.
Slide 12: Financial performance – A review
Financial performance – A review Total Expenditure: Import prices USD remain stable; Rupee depreciation resulted into higher costing Needle coke prices remain stable; Other raw material costs were significantly higher Interest cost has remained stable due to competitive borrowing arrangements Q2 Q2
Slide 13: Financial performance – A review
Financial performance – A review EBIDTA: EBIDTA stood at ` 44.2 crore in Q2 FY2012 from ` 55.2 crore in Q2 FY2011 Margins in Q2 FY2012 affected by higher domestic raw material costs and adverse forex movement on working capital borrowing Particulars (` crore) Q2 FY2012 Q2 FY2011 Shift (%) H1 FY2012
Slide 14: Financial performance – A review
Financial performance – A review Profit Before Tax in Q2 FY2012 at ` 14.6 crore as compared to ` 42.5 crore in Q2 FY2011 In Q2 FY2012, the Company reported a forex loss of ` 11.6 crore Shift (%) Particulars (` crore) Q2 FY2012 Q2 FY2011 Shift (%) H1 FY2012 H1 FY2011 PBT 14.6 42.5 (65.7) 39.6 77.0 (4
Slide 15: Segmental results – Graphite electrodes
Segmental results – Graphite electrodes Revenues stood at ` 313 crore in Q2 FY2012 as compared to ` 293.7 crore in Q2 FY2011 Operating momentum maintained on account of better capacity utilization Increasing volumes during the quarter Growth in steel production through the EAF route drive volumes Q2
Slide 16: Segmental results - Power
Segmental results - Power Revenues were at ` 56.6 crore in Q2 FY2012 from ` 45.3 crore in Q2 FY2011 Earnings performance influenced by Generation related costs increased on account of higher input prices Higher contribution from the hydel power plant at Tawa 3 power plants under operation with a tot
Slide 17: In summary
In summary 80,000 MT capacity to be operational in Q3 FY2012; phase I operational from Q1 FY2012 To augment performance once implemented Graphite Electrode outlook is encouraging Performance of the Steel and EAF sector observed to be positive Capacity expansion to accrue higher volumes going forward
Slide 18: In summary
In summary Operational performance to continue to be positive Volume growth is visible Model remains focused and robust HEG has secured its place as the world’s largest single site producer of graphite electrodes Economies of scale and low cost production are the key points by which the Company bene
Slide 19: Disclaimer
Disclaimer Statements in this document pertaining to future status, events, or circumstances, including but not limited to statements about plans and objectives, potential product characteristics and uses, product sales potential and target dates for product launch are forward-looking statements bas
Slide 20: About HEG Limited
About HEG Limited HEG Limited, a listed company of the LNJ Bhilwara Group, was established in 1977 in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie (SERS), a subsidiary of Pechiney of France. HEG Limited currently operates a 66,000 MT graphite electrode pla
Slide 21: About Graphite electrodes
About Graphite electrodes Graphite electrodes find their biggest industrial use in Electric Arc Furnaces (EAF) used in steel plants to melt steel scrap. The demand for graphite electrodes is therefore sensitive not to steel prices but to steel production volumes through the EAF route, which accounts
Slide 22: Contact details
Contact details For further information, please contact: Manvinder Singh Ajmani – CFO Sameera Kedar HEG Limited Citigate Dewe Rogerson Ph: +91 120 244 4541, 439 0224 Ph: +91 22 6645 1216 Fax: +91 120 254 1575 Fax: +91 22 6645 1213 Email: manvinder.ajmani@lnjbhilwara.com Email: sameera@cdr-india.com