Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q3 FY10 Earnings Presentation
33 slides from Hindalco Industries's earnings presentation, Jan 25, 2010
Slide 1: Hindalco Industries Limited Q3 FY10 Investors Presentation
Hindalco Industries Limited Q3 FY10 Investors Presentation 25th January’10 1
Slide 2: Highlights
Highlights Excellent Production Performance during Q3, FY10 Aluminium at 142 Kt Best Ever Alumina at 340 Kt Wire rod at 23 Kt Highest-ever 9-month production of alumina, aluminium and copper cathodes YOY Aluminium production up 5% FRP production up 34% Copper production up 22% Successfull
Slide 3: Stock performance post QIP
Stock performance post QIP Key 350 investors 340 Hindalco 330 320 LME Aluminum 310 LME Copper 300 Out performs 290 280 LME 270 260 250 240 230 220 210 200 190 180 170 160 150 5% 3% 140 130 120 110 Long only 100 8-Nov -09 21-Nov -09 5-J un-09 18-J un-09 1-J ul-09 14-J ul-09 27-J ul-09 12-J an-10 1-A
Slide 4: Backdrop: World Economy is gradually recovering
Backdrop: World Economy is gradually recovering GDP growth- Major economies India growth US, Euro Area Growth (%, qoq, SAAR) China Growth (%, yoy) (%, yoy) Growth in India and China is getting close to pre-crisis levels, while that of OECD countries is just turning positive 4
Slide 5: Business Conditions: Aluminium in recovery mode
Business Conditions: Aluminium in recovery mode Aluminium Exchange stock plateauing out, though still at high levels. tons $/t 2,600 4,500,000 2,400 LME CSP 2,200 3,500,000 US$/Mt 2,000 1,800 2,500,000 1,600 1,400 1,500,000 1,200 Exchange Stock= Comex+LME+Shanghai 1,000 500,000 800 0 8 09 -0 9 l -0
Slide 6: Business Conditions: Drivers
Business Conditions: Drivers Q3 FY 09 Q3 FY 10 Impact LME Average Al ($/ton) 1,821 2,002 LME Average Cu ($/ton) 3,905 6,648 Re/USD 48.76 46.64 Tc/Rc (Jap benchmark) 45/4.5 75/7.5 $/C In Aluminium, LME gain partially negated by adverse currency movement Benchmark Tc/Rc were higher but spot Tc/Rc now
Slide 7: Hindalco Strategy: Dealing with the downturn
Hindalco Strategy: Dealing with the downturn Challenges Actions Sweating of Assets, Focus Cost Push on Key raw materials Low LME Better product & geographical mix Cash Generation Working Capital reduction Volatility Robust Risk management practice &Early adoption of AS 30 Hindalco emerged relatively
Slide 8: Hindalco Financials - YOY
Hindalco Financials -YOY Q3 Q3 Change 9M 9M Change Rs Crores FY09 FY10 (%) FY09 FY10 (%) Net Sales 4,117 5,315 29% 14,448 14,132 -2% EBIDTA 779 748 -4% 2,722 2,115 -22% PBT 675 557 -18% 2,532 1,590 -37% PAT 545 427 -22% 1,962 1,252 -36% EPS 3.37 2.41 -28% 13.61 7.26 -47% *On early adoption of AS-30,
Slide 9: Hindalco Financials – Sequential
Hindalco Financials – Sequential Rs Crores Q2 FY10 Q3 FY10 Change (%) Net Sales 4,917 5,315 8% EBIDTA 609 748 23% PBT 434 557 28% PAT 345 427 24% EPS 2.02 2.41 19% 9
Slide 10: Aluminium Business Performance
Aluminium Business Performance 10
Slide 11: Brownfield expansion and sweating of assets led to improved production volume
Brownfield expansion and sweating of assets led to improved production volume Kt Kt FRP Prodn Kt 60.0 53.2 55.0 49.3 50.0 45.8 41.0 40.0 30.0 20.0 10.0 0.0 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 11
Slide 12: Aluminium: Sequential Performance
Aluminium: Sequential Performance Rs Crores Q2 FY10 Q3 FY10 Change Net Sales & 1650 1885 14% Operating Revenue EBIT 259 438 69% 12
Slide 13: Aluminium: Y-o-Y Performance at a glance
Aluminium: Y-o-Y Performance at a glance Rs Crores Q3 FY09 Q3 FY10 Change Net Sales & 1,980 1,885 -5% Operating Revenue EBIT 530 438 -17% 13
Slide 14: Copper Business Performance
Copper Business Performance 14 14
Slide 15: Continuous improvement in operational performance
Continuous improvement in operational performance Anode (Mt) 22% •Improved efficiency leading to lower conversion costs & •Value extraction from By-products •Gypsum Sale •Slag beneficiation Cathode (Mt) Helped in Offsetting the 89,152 89000 negative 85000 81000 22% impact of sharp fall in 77000 Bypr
Slide 16: Copper: Sequential Performance at a glance
Copper: Sequential Performance at a glance Rs Crores Q2 FY10 Q3 FY10 Change Net Sales & 3269 3432 5% Operating Revenue EBIT 217 159 -27 % 16 16
Slide 17: Copper: Y-o-Y Performance at a glance
Copper: Y-o-Y Performance at a glance Rs Crores Q3 FY09 Q3 FY10 Change Net Sales & 2,139 3,432 60 % Operating Revenue EBIT 116 159 38 % 17 17
Slide 18: Projects
Projects 18
Slide 19: Hirakud Smelter and Power Plant Expansion
Hirakud Smelter and Power Plant Expansion Smelter Expansion Capacity increase from 155 to 213 KTPA through two projects 1) 28 Pots – 80 KA 2) 80 Pots – 235 kA Power Plant Expansion Capacity to increase to 467.5 MW by Addition of 100 MW. 80 Pots –Status Update First Metal Oct’ 2011 Technology GAMI De
Slide 20: Greenfield Project – Mahan Aluminium
Greenfield Project – Mahan Aluminium First Metal from Smelter- July ’11 20
Slide 21: Mahan Smelter- Pot line and area grading photos
Mahan Smelter- Pot line and area grading photos 21
Slide 22: Greenfield Project – Utkal Alumina
Greenfield Project – Utkal Alumina Engineering Basic Engg-100 % Complete, Detailed Engg- 86% Completed, not on critical path Statutory Clearances Obtained Commitment & Spent Rs.3877 Crs Committed & Rs 1423 Cr Spent. All major order placed. Site Progress: Major Contractors have fully mobilized at sit
Slide 23: Greenfield Project – Utkal Alumina
Greenfield Project – Utkal Alumina Digestion area – civil foundation under progress Pipe rack‐ PR 022, 48 columns & beams erection completed OH Tank Foundations under progress Evaporation Package – Foundations ready for structure PPTs – 5 tanks shell erection in various stages (TK-202, 23 columns er
Slide 24: Greenfield Project – Aditya Smelter
Greenfield Project – Aditya Smelter Engineering Basic Engg-nearing completion, Detailed Engg- 43% Complete. Statutory approvals Major approval received. Stage I clearance for MOEF received. Commitment & Spent Rs.4349 Cr. Committed and Rs 1020 Cr. spent Site Progress Project Office at Lapanga – Samba
Slide 25: Jharkhand Smelter
Jharkhand Smelter Land Total land requirement of ~4000 Acres identified. Water Water drawl clearance received for 55 MCM. Route Survey and Design of water drawl scheme completed and report submitted. Environmental TOR presentation done at MoEF. clearance Railway Report for Conceptual Approval of Rai
Slide 26: Aditya Refinery
Aditya Refinery Land Land requirement is ~ 1881 Acres. Entire Private land is registered in the name of company, Process for government land in process. Water Agreement signed with Government of Orissa for drawl of water from Pathgarha river. Environmental Clearance received, subject to Forest diver
Slide 27: Brownfield Project – Can Body Stock at Hirakud
Brownfield Project – Can Body Stock at Hirakud Project Cost Approved for 850Cr. Dismantling at The work has started from 1st week of January. Duration – 6 Rogerstone Months. Shipping will start from 3rd week of February. Upgradation of Hot The order has been placed Mill New Cold Mill order Technical
Slide 28: Summing Up
Summing Up All-out cost focus helped us during the downturn With improving economic prospects, outlook seems promising Energy prices and concentrate sourcing continue to be the key challenges Positive about coming out of the downturn with our targeted growth trajectory unchanged 28
Slide 29: Appendix
Appendix 29
Slide 30: Aluminium Production
Aluminium Production Production (MT) Q3 FY10 Q3 FY09 9M FY10 9M FY09 Alumina 339,899 319,074 963,522 918,959 Metal 142,048 135,073 417,382 390,274 Wire Rod 23,363 18,657 68,726 54,703 Flat Rolled Products 55,030 40,968 157,484 137,474 Extrusion 10,531 7,555 29,158 28,780 30
Slide 31: Aluminium Sales Revenue
Aluminium Sales Revenue Q3 Q3 9M 9M Sales Units FY09 FY10 FY09 FY10 Chemicals Rs Crs 138 161 494 418 Primary metal Rs Crs 1,025 804 2,646 2,105 Flat Rolled Products & Rs Crs 621 712 2,139 1,913 Foil Extruded products Rs Crs 108 151 462 391 Others Rs Crs 88 57 302 129 31
Slide 32: Copper Production Volumes
Copper Production Volumes Production (MT) Q3 FY10 Q3 FY09 9M FY10 9M FY09 Copper Cathodes 89,152 72,877 258,626 210,851 CC Rods (Own) 32,969 33,189 93,671 91,249 32
Slide 33: Copper Sales Revenue
Copper Sales Revenue Sales Revenue Unit Q3 FY09 Q3 FY10 9M FY09 9M FY10 Copper Cathodes Rs Crs 729 1,706 3,385 4,318 CC Rods Rs Crs 1,016 1,114 3,351 3,222 Others Rs Crs 394 612 1,675 1,641 33