Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q1 FY2011 Earnings Presentation
38 slides from Hindalco Industries's earnings presentation, Aug 13, 2010
Slide 1: Hindalco Industries Ltd Investor Presentation Q1 FY2011
Hindalco Industries Ltd Investor Presentation Q1, FY2011
Slide 2: Economic & Industry Backdrop
Economic & Industry Backdrop 2
Slide 3: Global Recovery continues at a measured pace
Global Recovery continues at a measured pace y Growth still continues; though China YOY % GDP growth rate from slowed down marginally in Q2, Q2 2009 to Q2 2010 2010 12 10.3 10 % 9.3 y Risk appetite affected by – 7.9 8 ¾ Sovereign debt crisis in parts of 6.0 6 Europe 4 2.4 ¾ Renewed fears of economy
Slide 4: India: Strong growth in end user industries
India: Strong growth in end user industries Electrical & Electronics Aluminium consumption (kt) 435 390 Building & Construction Consumer Durable 11.5% Copper consumption (kt) Automobile & transport 160 166 Industrial Machinery 3.8% Packaging Source: Industry
Slide 5: Key Industry Drivers and impact
Key Industry Drivers and impact Industry Driver Change ( %) Impact Aluminium LME 41 Average($/ton) Copper TC/RC (36) LT (Industry) Exchange (6) Rate (Rs/$) Energy & Crude >25 derivatives
Slide 6: Performance Highlights
Performance Highlights 6
Slide 7: Performance Highlights – Q1 FY11
Performance Highlights – Q1 FY11 YoY… ¾ Net profit up 11% ¾ Aluminium: All round increase in production Conversion cost brought down despite inflationary pressures ¾ Copper: Highest ever own copper rod production in a quarter Respectable output inspite of planned shut down ¾ Greenfield proje
Slide 8: Financial Performance
Financial Performance Cr Q1 FY10 Q1 FY11 Change (%) Net Sales 3,897 5,178 33 PBIDTA 833 901 8 PBT 600 673 12 PAT 481 534 11 EPS ( ) 2.83 2.79* (1) *EPS maintained despite 12.5% equity dilution post QIP Total number of shares increased from 170 Cr to 191 Cr 8
Slide 9: Business Conditions and Performance Review - Aluminium
Business Conditions and Performance Review - Aluminium 9
Slide 10: World Aluminium Market: Consumption
World Aluminium Market : Consumption Consumption growth in H1, 2010 has slowed down as China and rest of Asia took a breather (% change over the previous six-months) The global demand recovery continued; though at a relatively slower pace after a strong pull back in H2, 2009 ¾ China: pace of growth
Slide 11: World Aluminium Market: Production
World Aluminium Market : Production Production too growing; though the growth has moderated (% change over the previous six-months) o Sequential production growth rate came down with concerns around demand recovery & setting in of risk aversion ¾ Aluminium prices declined making a large proportion o
Slide 12: Al: Key Performance Drivers
Al: Key Performance Drivers Macro Factors Our Response Q1 Q1 Impact Production FY10 FY11 9 Higher across the board through asset sweating LME ($ / t) 1,488 2,092 Metal conversion cost INRUSD 48.81 45.70 9 Reduced in an inflationary environment through efficiency Cost measures Pressures Crude & Prici
Slide 13: All-round improvement in production
All-round improvement in production FRP (tonnes) 51,373 9% 4% 4% 49,304 FY10 Q1 FY11 Q1 Extrusions (tonnes) Foils (tonnes) 9 Production increased 9617 33% 4781 across the board on the 9% 3600 back of asset sweating & 8812 brownfield expansion 9 Robust growth in VAP FY10 Q1 FY11 Q1 FY10 Q1 FY11 Q1 pr
Slide 14: Alumina: Increased Dominance in Specials
Alumina: Increased Dominance in Specials Domestic sales Export sales 21% 70% 17,725 12,498 14,658 7,357 38% 44% 3,623 5,015 3,860 2,685 Q1 FY'10 Q1 FY'11 Q1 FY'10 Q1 FY'11 Special Hydrate Special Alumina Special Hydrate Special Alumina Higher Sales across the categories Dominant market share 14
Slide 15: Aluminium Business: Financial Performance
Aluminium Business: Financial Performance Q1 FY10 Q1 FY11 Change (Rs cr) (%) Net Sales & 1,419 1,867 32 Operating Revenue EBIT 455 552 21 15
Slide 16: Business Conditions and Performance Review - Copper
Business Conditions and Performance Review - Copper 16
Slide 17: CU: TCRC continued downward trend in the wake of Global concentrate shortages
CU: TCRC continued downward trend in the wake of Global concentrate shortages 13,104 12,414 (kt) y Mine supply continued to fall short of demand for concentrate y Spot TCRC moved closer to zero in the last quarter 17.5 y Double-digit TCRC unlikely in 20 Spot TCRC (c/lb) 15 8.7 near future 10 4.1 2.0
Slide 18: Cu: Key Performance Drivers
Cu: Key Performance Drivers Macro Factors Our Response Production 9 Production maintained despite Q1 FY11 planned shutdown in Cu-III; DAP Over Q1 output up FY10 Conversion cost (w/o credits) TCRC 9 Maintained at last year’s level though energy input costs Acid realization increased sharply Fertilize
Slide 19: Cu: Q1 FY11 Energy cost pressures
Cu: Q1 FY 11 Energy cost pressures % change Over Q1 Input FY10 Imported coal >10 Furnace oil >30 Naphtha >20 LNG >15 Across the board rise in energy prices Impact of rising energy prices countered through productivity improvement and efficiency optimisation measures
Slide 20: Cu: Production Performance: Q1 FY11
Cu: Production Performance: Q1 FY11 9Higher Anode 4% production despite 3% annual plant shut down 9 Gold production increased 27% 9 Ratio of VAP to 56,510 40,708 106% cathode production up 38% from 37% to 53% 27,384 9 DAP production doubled 20
Slide 21: Copper Business: Financial Performance
Copper Business: Financial Performance Q1 FY10 Q1 FY11 Change (Rs cr) (%) Net Sales & 2,479 3,314 34 Operating Revenue EBIT 156 124 (21) In addition to largely adverse business drivers, the financial performance suffered on account of planned shutdown (~ 3 weeks) in one of the smelters The impact wa
Slide 22: Projects – An Update
Projects – An Update 22
Slide 23: Planned Growth Trajectory
Planned Growth Trajectory KT Aluminium Smelting capacity 1,800 1,600 Jharkhand- Q1 FY14 1609 1638 1,400 1,200 1295 1,000 Mahan-Q2 FY12 Aditya-Q3 FY12 800 600 Hirakud brownfield 718 517 559 400 535 200 0 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 23
Slide 24: Greenfield Project – Utkal Alumina
Greenfield Project – Utkal Alumina Engineering Basic Engg-100 % Complete, Detailed Engg- 92% Completed, Statutory Obtained Clearances Commitment Over 82% project cost committed & Spent All major order placed. Financial closure achieved Site Progress: More than 5000 people working at site. Major Cont
Slide 25: Activity at Project Sites: Utkal
Activity at Project Sites: Utkal BTG Package:Boiler#1: APH erection in progress Predisilication tank:TK 203-105,106: Erection of 3rd shell in progress Calcination Area: Stack #1: 4th shell completed BTG Package:Boiler#1: 4 Tier column erection. 25
Slide 26: Greenfield Project – Mahan Aluminium
Greenfield Project – Mahan Aluminium Engineering Basic Engg-94 % Complete, Detailed Engg- 60% Complete Statutory Major approvals in place. approvals Orders Orders for all major, long delivery equipment placed Commitment & ` Around 82% of project cost committed Spent Site Progress More than 10,000 pe
Slide 27: Activity at Project Sites: Mahan
Activity at Project Sites: Mahan Pot room-B GTC – ID Fans Shuttering work for Chimney Shell TG#1 27 27
Slide 28: Greenfield Project – Aditya Smelter & CPP
Greenfield Project – Aditya Smelter & CPP Engineering Detailed Engg- 59% Complete for smelter & 25 % complete for CPP. Statutory Major approvals received. Forest land stage I clearance approvals received. Permission to start project site consolidation activities received. Stage II clearance is progr
Slide 29: Jharkhand Smelter
Jharkhand Smelter Land Total land requirement of ~4000 acres for the project. Land has been identified. Application for acquisition of private land has been submitted. Acquisition of Govt. land to proceed after private land acquisition. Water Water drawl clearance received for 55 MCM. Environmental
Slide 30: Aditya Refinery
Aditya Refinery Land Land required for the project is ~ 1881 Acres. 1387 Acres of land registered in name of company, process for balance land is in progress. Water Water drawl agreement to draw upto 10.42 cusecs obtained. M/s Simplex Infrastructure Ltd is awarded with the job for supply & erection
Slide 31: Brownfield Project: Hirakud Expansion
Brownfield Project: Hirakud Expansion Smelter Capacity increase from 161 to 213 KTPA through addition of Expansion 80 Pots of 235 kA. Intend to expand it to 360 KT Power Plant Capacity to increase to 467.5 MW by addition of 100 MW. Expansion Project 30 pots to be commissioned by Dec’2011 & balance 5
Slide 32: Brownfield Project – Can Body Stock at Hirakud (Project Blue Fox)
Brownfield Project – Can Body Stock at Hirakud (Project Blue Fox) Dismantling 98 % dismantling completed. Containers are being and receipt of dispatched and some have arrived in India equipments Cold Mill Order placed on Achenbach. Hot Mill Order placed on ABB for refurbishment of Main Motors Site o
Slide 33: Appendix
Appendix ADITYA BIRLA
Slide 34: Performance at a glance
/— CE Performance at a glance ADITYA BIRLA a Net Sales EBIT @ Aluminium 1 i 1 j , if Copper
Slide 35: Revenue: Aluminium
Revenue: Aluminium Sales Revenue Q1FY10 Q1FY11 % Change Chemicals 115 154 34% Primary metal 583 799 37% Flat Rolled Products 531 673 27% Extruded products 103 140 36% Others 87 101 16% 35
Slide 36: Revenue: Copper
Revenue : Copper Sales Revenue Q1FY10 Q1FY11 % change Copper Cathodes 1,015 1,263 24% CC Rods 954 1,433 50% Fertilizers & Acid 60 195 224% Precious Metals & Others 450 423 -6% 36
Slide 37: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the
Slide 38: Thank you
Thank you 38
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