Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q3 FY2004 Earnings Presentation
37 slides from Hindalco Industries's earnings presentation, Jan 22, 2004
Slide 1: Presentation to Investors Q3 & 9M FY 2004 - Results
Presentation to Investors Q3 & 9M FY 2004 - Results January 22, 2004
Slide 2: Presentation Structure
Presentation Structure 9Overview Hindalco – Q3 FY 2004 Results Aluminium Business Performance Review Copper Business Performance Review
Slide 3: Hindalco Performance Highlights Q3'04
Hindalco Performance Highlights Q3’04 •Net Sales Rs. 1,658.9 Crores 32.6% •PBIDT Rs. 415.8 Crores 15.4% •PBT Rs. 298.2 Crores 14.7% •PAT Rs. 196.1 Crores 10.6% •EPS Rs. 21.2 10.6% 3
Slide 4: Aluminium – Performance Highlights Q3'04
Aluminium – Performance Highlights Q3’04 • Benefits from Brownfield Expansion begins to flow o Highest ever Production at 82,142 MT – up by 35.8% o Sales Volumes at 83,342 MT – up by 46.4%. • Realisations remain flat as :- o Increased Metal production sold as Ingots o Rupee Appreciation neutralized
Slide 5: Copper – Performance Highlights Q3'04
Copper – Performance Highlights Q3’04 • Smelter I operating at new record levels o Cathode Production for Q3 exceeds 50,000 Tonnes • Copper II Expansion o All equipment have been installed o Individual Equipment testing under progress • Profits during Quarter affected by o Lower TcRc o Higher SAD /
Slide 6: Presentation Structure
Presentation Structure Overview 9 Hindalco – Q3 FY 2004 Results Aluminium Business Performance Review Copper Business Performance Review
Slide 7: Hindalco Financial Results
Hindalco Financial Results (Rs. in Crores) Particulars Q3’04 Q3’03 Change % 9M’04 9M’03 Change % Net Sales 1,658.9 1,251.4 32.6 4,289.2 3,655.2 17.3 Other Operating Income 18.4 4.8 282.7 39.7 19.5 103.8 Other Income 29.8 53.2 (44.0) 176.3 142.1 24.1 PBDIT 415.8 360.2 15.4 1,273.8 1,128.3 12.9 Intere
Slide 8: Segment Results
Segment Results (Rs. In Crore) Aluminium Copper Q3’04 Q3’03 9M’04 9M’03 Q3’04 Q3’03 9M’04 9M’03 Net Sales 761 522 2,122 1,677 901 730 2,173 1,978 EBIT 228 115 627 454 76 125 248 348 Capital Employed 3,969 3,621 3,969 3,621 2,528 2,332 2,528 2,332 ROCE % Annualised 23.0% 12.8% 21.1% 16.7% 12.0% 21.5%
Slide 9: Other Income
Other Income Rs. in Crores Lower Other Income on account of :- 53.2 ¾Fall in Interest Rates and Yields 44.4% ¾Q3 FY 03 included :- • Interest of Rs. 10 Crores on IT 29.8 Refund • Dividend of Rs. 3.5 Crores from Nalco, this year accounted in Q2 Q3 FY 03 Q3 FY 04 9
Slide 10: Interest & Financing Charges
Interest & Financing Charges Rs. in Crores ¾ Gross Interest is lower as a result of following initiatives in Q2’04 45.7 • Exercised call option and 42.8 redeemed 10.75% NCDs of Rs. 100 Crores 37.1 33.1 • Pre-paid Loans / Debentures of Rs. 161.1 Crores ¾ Net Interest is high as Interest Capitalisatio
Slide 11: Taxes
Taxes Tax (Rs. Cr.) Despite lower 80 HHC benefits, 17.9% Effective current tax rate declined 68.3 from 23.0% to 19.6% due to:- 57.9 ¾ Higher WDV Depreciation 36.5% ¾ Higher set-off of Long Term 33.8 Capital Gains against carried 24.7 forward losses ¾ Reduced Marginal tax rate Consequently Deferred T
Slide 12: Presentation Structure
Presentation Structure Overview Hindalco – Q3 FY 2004 Results 9 Aluminium Business Performance Review Copper Business Performance Review
Slide 13: Aluminium: Strengthening Operations
Aluminium: Strengthening Operations 236 252 250 286 300 40 180 158 9 Enhanced Volumes 30 200 20 9 Improved operating parameters 33.9 38.0 37.6 1 00 10 30.3 35.9 31.6 9 Higher Sales on liquidation of 0 0 inventory of previous quarter Q2 '03 Q3 '0 3 Q4 '03 Q1 '04 Q2 '0 4 Q3 '0 4 E EBIDTA Marg in (%) E
Slide 14: Aluminium: Financial Results
Aluminium : Financial Results (Rs. in Crores) Particulars Q3’ 04 Q3’ 03 % 9M’ 04 9M’ 03 % Change Change Sales Volumes (MT) 83,342 56,932 46.4 235,925 186,827 26.3 Net Sales 761.2 521.5 45.9 2,121.7 1,677.2 26.5 Other Operating 1.8 2.3 (22.0) 10.4 10.1 3.0 Income EBIDTA 286.0 160.8 77.9 789.7 582.2 3
Slide 15: Aluminium: Production Performance
Aluminium : Production Performance Production Unit Q3’ 04 Q3’ 03 Change 9M’ 04 9M’ 03 Change Alumina MT 161,487 123,870 37,617 442,685 360,573 82,112 Primary Metal MT 82,142 60,470 21,672 239,902 191,001 48,901 Wire Rod MT 15,087 10,446 4,641 42,762 36,390 6,372 Rolled Products MT 18,169 18,550 (381
Slide 16: Higher Sales Volumes
Higher Sales Volumes Quantity Q3 FY Q3 FY Net Sales (Rs. Crore) MT 2003 2004 761.2 Domestic 46,852 73,644 Exports 10,080 9,698 45.9% Total 56,932 83,342 521.5 % Change Volumes Realisations Domestic 57.2 (1.7) Exports (3.8) 5.2 Total 46.4 (0.3) Q3 FY 03 Q3 FY 04 Appreciating Rupee & Competitive Press
Slide 17: Higher Value Added Products
Higher Value Added Products Volume (MT) Sales (Rs. Crore) 22,020 23,462 234.1 254.6 38.7% 28.2% of total net sales 44.9% 33.4% 6.5% 8.8% 4,480 4,666 60.3 64.6 4.1% 7.1% 4,776 Foil 49.8 4,743 0.7% 48.7 2.2% Extrusion Rolled 12,797 14,020 125.1 140.3 9.6% 12.1% Q3 FY 03 Q3 FY 04 Q3 FY 03 Q3 FY 04 Both
Slide 18: Operating Expenditure & Profit
Operating Expenditure & Profit Op. Exp. Op. Profit Rs. in Crores ¾Operating Profit increased by 477.0 77.9% on the back of 46.4% Higher 363.1 286.0 Volumes but 31.4% increase in expenditure 160.8 ¾Economies of Scale and improved Operating Parameters from Brownfield Expansion Q3 FY 03 Q3 FY 04 (Rs. C
Slide 19: Aluminium: Industry Outlook
Aluminium: Industry Outlook Global Scenario • With recovery firmly on path, global economy to witness strong growth in 2004 • Currency movements in Europe and Japan is an area of concern • Increasingly stronger US to drive comprehensive global recovery; unemployment levels remain conspicuously high
Slide 20: Aluminium: Industry Outlook
Aluminium: Industry Outlook Price Outlook • Fund activity, higher non-ferrous metal prices, technical tightness and weaker dollar support high international prices. • A range of US$ 1550 to US$ 1575 seen as sustainable • Domestic price outlook stable - Rupee Appreciation counters improved LME LME ($
Slide 21: Presentation Structure
Presentation Structure Overview Hindalco – Q3 FY 2004 Results Aluminium Business Performance Review 9 Copper Business Performance Review
Slide 22: Copper: Financial Results
Copper : Financial Results (Rs. Crores) Particulars Q3’ 04 Q3’ 03 % 9M’ 04 9M’ 03 % Change Change Sales Volumes (MT) 53,567 48,397 10.7 143,206 140,048 2.3 Net Sales 900.8 729.9 23.4 2,172.6 1,978.0 9.8 Other Operating 16.6 2.5 569.0 29.3 9.4 212.0 Income EBIDTA 98.5 147.2 (33.1) 315.5 413.4 (23.7)
Slide 23: Copper: Production Performance
Copper : Production Performance Production Unit Q3’ 04 Q3’ 03 Change 9M’ 04 9M’ 03 Change Copper MT 50,301 48,528 1,773 135,616 140,099 (4,482) Cathodes CC Copper MT 26,553 18,344 8,209 67,169 56,397 10,772 Rods DAP / NPK MT 81,015 79,038 1,977 176,618 254,202 (77,584) Gold Kg 2,032 1,711 321 4,634
Slide 24: Sales Volumes & Turnover
Sales Volumes & Turnover Quantity (MT) Q3 2004 Q3 2003 26,663 26,905 Domestic 20,184 21,766 Deemed Exports 6,479 2,766 24,532 23,865 Total Domestic 26,663 24,532 Exports 26,905 23,865 Total 53,568 48,397 Q3 2004 Q3 2003 Sales Value (Rs. Crore) 901 730 Domestic Exports 24
Slide 25: Operating Profit
Operating Profit Operating Profits (Rs. Crore) • Lower TcRc and Rupee 33.1% 147.2 Appreciation . 98.5 • Higher DEPB premiums. • Adverse change in Market Mix Q3 FY 03 Q3 FY 04 25
Slide 26: Copper: Global Industry Outlook
Copper: Global Industry Outlook • Copper fundamentals improving ¾ Global demand up by 2.5% in 2003 (4% in 2002) and likely to grow by 5.4% in 2004 supported by global economic recovery ¾ Tight concentrate supply leads to production cutbacks and deferred commissioning of new capacities to restrict su
Slide 27: Copper LME Cash Prices: US $ / MT
Copper LME Cash Prices : US $ / MT YEARLY AVERAGES 2000-01 1805.78 2300 2001-02 1526.52 2200 2002-03 1586.12 2100 2003-04 9M 1818.66 2000 1900 1800 1700 1600 1500 1400 1300 01 02 03 00 01 02 03 03 00 01 02 0 -0 g- r- ug ug ug ec ec ec pr pr pr ec Ap Au 'A 'A 'A 'A 'A 'A "D 'D 'D D 27
Slide 28: Domestic Scenario & Outlook
Domestic Scenario & Outlook •Domestic scenario is not encouraging ¾Negative Growth in JFTC segment continues as BSNL & MTNL still to release orders for 03-04 ¾Supplies to rise with expanded capacities of both Custom Smelters •Other Segments help in slight Recovery ¾Growth in Winding wire and Transfo
Slide 29: Concentrate Market
Concentrate Market Unprecedented increase of copper concentrates purchase during the calendar year 2003 by China (an increase of about 35% y-on-y to about 2.7mt) has put pressure on the concentrate availability in the spot market and the spot TCRCs touched historic lows. Accident at one of the w
Slide 30: Combined TCRC (c/lb) at 30% Grade
Spot TCRC tumbled to historic lows From 5.64 c/lb at the beginning of the financial year to 2.57 c/lb in Dec- 03, a drop of over 30% due to aggressive buying by Asian Smelters Combined TCRC (c/lb) at 30% Grade 12.00 10.00 8.97 11.03 8.00 6.41 5.90 6.00 4.87 3.85 3.85 4.00 2.57 2.00 0.00 Apr-02 Jul-0
Slide 31: Thank You
Striving to create superior value for stakeholders THANK YOU
Slide 32: Press Release: Q3 FY 2003-04 Posts Good Performance
PRESS RELEASE Date: 22.01.2004 HINDALCO THE ADITYA BIRLA GROUP'S FLAGSHIP COMPANY Q3 FY 2003-04 POSTS GOOD PERFORMANCE • Turnover Rs. 1,659 Crores 32.6% • PBDIT Rs. 416 Crores 15.4% • Net Profit Rs. 196 Crores 10.6% • EPS (for the Quarter) Rs. 21.2 Financial Highlights (Rs. in Crores.) Quarter Quart
Slide 33: Q3 Performance Review
Q3 Performance Review Hindalco, the flagship Company of the Aditya Birla Group, has turned in an impressive performance during the 3rd Quarter ending December 31st, 2003. The Company has attained a turnover of Rs. 1,658.9 Crores, which is 32.6% higher than that of Rs. 1,251.4 Crores achieved in the
Slide 34: Operational Review: Extruded Products, Foil, Copper
• Extruded Products output fell by 4.9% from 4,743 MT last year to 4,510 MT this year due to market conditions. • Production of Foil stood at 4,664 MT vis-à-vis 4,648 MT reached in the corresponding period last year. • The output of Alumina, which is a key input, at 161,487 MT was 30.4% higher over
Slide 35: AIOE Award for Outstanding Industrial Relations
AIOE Award for Outstanding Industrial Relations In recognition of its corporate initiative in the field of Industrial Relations, Social Security and promoting Bi-Partism for the year 2002-2003, Hindalco has been accorded the prestigious “AIOE award for Outstanding Industrial Relations” Instituted by
Slide 36: Hindalco's Outlook
Hindalco’s Outlook The Company remains committed to its three - pronged strategy of vertical integration, thrust on branding and continued emphasis on value added products. Hindalco’s outlook remains positive. ***
Slide 37: Unaudited Financial Results, Segment-wise Revenue and Capital Employed
HINDALCO INDUSTRIES LIMITED Regd. Office: "Century Bhavan",3rd Floor, Dr.Annie Besant Road, Worli, Mumbai-400 025 UNAUDITED FINANCIAL RESULTS (PROVISIONAL) FOR THE SEGMENT-WISE REVENUE, RESULTS AND CAPITAL EMPLOYED QUARTER ENDED 31ST DECEMBER, 2003 UNDER CLAUSE 41 OF THE LISTING AGREEMENT (Rupees in
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