Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q1 FY14 Earnings Presentation
26 slides from Hindalco Industries's earnings presentation, Aug 13, 2013
Slide 1: Investor Presentation Q1 FY14
INVESTOR PRESENTATION Q1 FY14 August 13, 2013
Slide 2: Global Economy: Recovery still elusive
Global Economy: Recovery still elusive 58.0 Global Manufacturing PMI China Industrial Growth (%, yoy) 56.0 16 15 54.0 14 52.0 13 12 50.0 11 48.0 10 9 46.0 8 Jul-11 Apr-12 Jul-12 Apr-11 Oct-12 Oct-11 Jan-13 Jan-12 Apr-13 Jul-13 Jan-11 7 6 Signs of modest recovery in developed markets, but heightene
Slide 3: Al LME at lowest level since 2009
Al LME at lowest level since 2009 Global inventory still very high, but Aluminium LME ($/t) 2700 2600 has come down from 94 days in 2500 Dec’12 to 86 days in Jun’13 2400 2300 Market was in a deficit of ~600 kt 2200 2100 in Q2 –CY 13, though 2013 likely 2000 1900 to be near-balanced 1800 Nearly
Slide 4: Highlights
HIGHLIGHTS … Financial Highlights Q1 FY 14 (YOY)… EBIDTA 3% PBITDA 19% PAT 12% Mahan under ramp up Utkal Refinery goes on stream Planned shutdown at Dahej affected copper volumes First Metal tapped at Hirakud’s expanded facility, Hirakud FRP commissioned Utkal debt refinanced in Jul’13 amidst
Slide 5: Financial Performance: Q1
Financial Performance: Q1 ` Cr Q1 FY14 Q1 FY13 Change Net Sales 5,838 6,028 (3.2%) EBITDA 478 463 3.2% PBITDA 906 765 18.4% PBT 575 513 12.1% PAT 474 425 11.6% EPS (``) 2.48 2.22 11.6% Q1, FY14 includes other income of `428 crore (Vs`301 cr in Q1 FY 13) – mainly related to higher treasury balance, d
Slide 6: Performance Review: Aluminium
PERFORMANCE REVIEW: ALUMINIUM Margin squeeze in the industry continues 6
Slide 7: Al: External factors
Al: External factors Q1 FY14 vs. Q1 FY13 Impact LME ($/t) Exch. Rate (`/$) Ingot Premium Rising Key Input Prices 7
Slide 8: Al input costs vis a vis LME
Al input costs vis a vis LME…. Movement in LME and Input Costs since the global financial crisis FY09 FY10 FY11 FY12 FY13 Q1 FY14 180 >50% >60% >50% >50% 160 FY09 = 100 140 120 100 80 60 40 20 0 `LME Coal Caustic FO Bauxite 8
Slide 9: Al: Production Performance
Al: Production Performance (Kt) Q1 FY14 Q1 FY13 Change (%) Alumina 348 335 3.9 Metal 139 132 5.4 FRP 56.4 55.8 1.1 Extrusions 9.2 8.9 3.2 Metal output includes 2.1 kt trial production at Mahan 9
Slide 10: Al: Financial Performance
Al: Financial Performance Net Sales (` Crore) EBIT (` Crore) 270 2,063 2,211 249 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 10
Slide 11: Novelis Q1 FY14: Highlights
Novelis Q1 FY14 : Highlights Shipments at 708 kt, down 2% YoY Adjusted EBIDTA $204 Million, down 21% YoY Impact of pricing pressures and softer than expected Can customer demand driven by unfavorable weather conditions Also, includes one time adjustment to company’s LT incentive plan Stron
Slide 12: Performance Review: Copper
PERFORMANCE REVIEW: COPPER Major overhaul of Cu - 3 completed 12
Slide 13: Cu: External factors were mixed
Cu: External factors were mixed Q1 FY14 vs. Impact Q1 FY13 TCRC Slightly higher LME ($/t) Sharply lower Exch. Rate (`/$) Favourable Acid Price Significantly lower DAP Realization Weaker Sharp drop in acid realizations and fall in DAP realisations key challenges in the coming months 13
Slide 14: Cu: Production Performance
Cu: Production Performance A major overhaul of Copper-III was undertaken in Q1 wherein plant health issues were addressed through a 61 days planned shutdown Q1 FY13 also had a planned shutdown of both smelters and fertilizer plant Cathode (kt) CCR (kt) 13% DAP (kt) 49% 69 68 41 42 36 28 Q1 FY13
Slide 15: Cu: Financial Performance
Cu: Financial Performance Volumes were affected in Q1 FY13 and Q1 FY14 by planned shutdowns Net Sales (` Crore) EBIT (` Crore) 3,972 3,636 81 76 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 15
Slide 16: Segmental Performance – Q1 FY14
Segmental Performance – Q1 FY 14 Aluminium Greenfield Copper SALES 38% 62% EBIT 75% 25% C.E 20% 66% 14%
Slide 17: Projects Update
ADITYA BIRLA PROJECTS UPDATE
Slide 18: Mahan: Trial Production on; Ramping Up
Mahan: Trial Production on; Ramping Up 18
Slide 19: Utkal: CPP and Refinery Operational
Utkal: CPP and Refinery Operational Bauxite Stock at Refinery Calcined Alumina in conveyor Utkal Debt Refinancing Flexibility negotiated in loan agreement as project-execution risks are over Entire debt refinanced @10.15% (vs. 13.2% earlier) – saving of `150 cr p.a. Refinancing executed in ext
Slide 20: Hirakud Smelter Expansion
Hirakud Smelter Expansion 20
Slide 21: Aditya Aluminium: Strong Progress
Aditya Aluminium: Strong Progress Pot Room Turbine Unit ~ 11,000 people at site 220KV line charged, Intake water line and Fuel oil system commissioned Construction progressing in full stream 21
Slide 22: Novelis - US Auto Line commissioning started
Novelis - US Auto Line 1 commissioning started 22
Slide 23: Key External Drivers - Outlook
KEY EXTERNAL DRIVERS - OUTLOOK Driver Current Assessment Impact LME • Demand is supportive, but concerns galore.. Over capacity, declining premium… INR USD • Uncertainty over FII flows may keep rupee depressed….. Energy, • Upward pressure related to Energy costs Input prices TcRc • 2013 terms favour
Slide 24: Overall Outlook
Overall Outlook Macro headwinds are likely to continue, although further downside risk to LME could be limited Stabilization of new facilties will continue to be the most important focus area for Aluminium Business in the coming quarters Copper Business expected to bounce back after the overhaul of
Slide 25: Thank you
ADITYA BIRLA HINDALCO ADITYA BIRLA HINDALCO Thank you
Slide 26: 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