Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q2 FY2016 Earnings Presentation
25 slides from Hindalco Industries's earnings presentation, Nov 12, 2015
Slide 1: Hindalco Industries Ltd Q2 FY2016
HINDALCO INDUSTRIES LTD Q2 FY2016
Slide 2: Highlights and Financial Performance Review
Highlights and Financial Performance Review – Aluminium Business Copper Business
Slide 3: Global Economy – Slowing China a big overhang
Global Economy – Slowing China a big overhang RMB devaluation and sharp correction in Chinese equity markets have raised the risk perception about China, along with slowing growth Recovery strengthening in Euro area and US, but emerging markets under strain – Brazil & Russia grappling with reces
Slide 4: Commodities Meltdown…
Commodities Meltdown… (July-Sep 2015 vs. Jul-Sep 2014) IMF All Commodity IMF Fuels IMF Metals Index Index Index Aluminium Copper Iron ore Crude oil 0% -10% -20% -30% -27% -25% -30% -40% -39% -40% -50% -47% -51% -60% Sharp decline across commodities… Source – IMF, Industry
Slide 5: Al: Realisations under Pressure
Al: Realisations under Pressure Al Realization LME MJP ($/t) Global aluminium consumption 2,600 growth @~4% in 2015 2,464 2,400 But, market expected to be in surplus 2,200 of 1Mt+ in 2015 with strong supply 2,000 1,614 growth (mainly China) 1,800 Nearly 25% of global capacity incurring 1,600 c
Slide 6: Q2 FY16: Highlights… Strong Operational Performance
Q2 FY16: Highlights… Strong Operational Performance Aluminium Strong Volume growth as facilities ramp up (India) Highest ever Metal sales , Volumes up 51% Strong Auto sheet Ramp up Novelis Record Global FRP shipments at 788 KT Copper Robust Operational performance (India) Sales Volumes u
Slide 7: Q2 FY16: Standalone Highlights…
Q2 FY16: Standalone Highlights… YOY Revenue up 4% even as commodity prices nosedive Aluminium revenues up 26% despite over 20% drop in LME and 75% decline in Premium Copper revenues decline 10% on account of 23% decline in LME PBIDTA at Rs 1020 Cr, supported by robust operational performance
Slide 8: Financial Performance: Standalone Hindalco
Financial Performance: Standalone Hindalco Change Change (`) Cr Q2 FY16 Q2 FY15 Q1 FY16 % YoY %QOQ Net Sales 8,925 8,554 4% 8,575 4% Other Income 418 223 87% 194 115% PBITDA 1,020 1120 (9%) 1,072 (5%) Depreciation (296) (196) 51% (332) (11%) Interest (616) (386) 60% (602) 2% PBT before 109 539 (80)%
Slide 9: Profit Before Tax Bridge - YoY
Profit Before Tax Bridge - YoY (` Crore) Lower operating income due Exceptional to adverse macros items* in Q2FY15 Higher Depreciation 194 & Interest 294 431 Higher Other 330 Income, incl. 119 Cr non- recurring 107 109 PBT PBT Q2 FY15 Q2 FY16 * Prov. for Talabira coal levy and diminution in ABML car
Slide 10: Recent Initiatives…
Recent Initiatives… Refinancing of project debt - Repayment tenor has been extended till 2030 Cost saving and cash conservation initiatives across operations Focus on logistics Operational efficiencies Inventory reduction Leverage tail winds in the downstream business
Slide 11: Aluminium Business
ADITYA BIRLA HINDALCO Aluminium Business
Slide 12: Al: External Drivers
Al: External Drivers Q2FY16 Q2 FY15 Q1 FY 16 LME ($/t) 1,589 1,989 1,769 INRUSD 65.0 60.6 63.5 MJP 100 404 210 Realisations declined as both LME and Premium dropped Re mildly supportive but much higher depreciation in other currencies led to sharp fall in global cost curve.. Negating any benefit
Slide 13: Al: Robust Production Performance
Al: Robust Production Performance From Greenfield projects (Figures in Kt = ’000 tonnes) Up 18% Up 44% Alumina* (incl. Utkal) yoy Metal yoy 637 644 628 269 593 264 241 531 498 217 190 187 330 117 129 274 316 338 93 70 208 240 45 49 145 138 147 148 148 140 290 292 319 320 314 290 Q1FY15 Q2FY15 Q3FY15
Slide 14: Al: Operational Performance…
Al: Operational Performance… Mahan & Aditya operating at design efficiencies COP on declining trend Utkal among the lowest cost alumina refineries globally Gare Palma mines – Mining to commence shortly… Wire rod and Billets – Production started at Mahan VAP sales picking up
Slide 15: Aluminium: Financial Performance
Aluminium: Financial Performance Net Sales (` Cr) EBIT (` Cr) 339 4,173 3,966 254 3,316 29 Q2 FY15 Q1 FY16 Q2 FY16 Q2 FY15 Q1 FY16 Q2 FY16 YOY – Revenue up 26% on the back of higher volumes EBIT declined on account of sharp drop in realisation & jump in depreciation
Slide 16: Novelis
Novelis oa NOVELIS
Slide 17: Novelis - Q2 FY16 Highlights
Novelis- Q2 FY 16 Highlights 788 KT 236 Mn
Slide 18: Copper Business
Copper Business
Slide 19: Cu: Supportive Industry Trends…
Cu: Supportive Industry Trends… Impact Q2 FY 16 Vs. Q2 FY 15 (YoY) TCRC Higher LME ($/t) Lower Exch. Rate (`/$) Favorable Acid Price Higher DAP Realization Higher
Slide 20: Strong Production growth
Cathode DAP 87 18% 4% 100 74 96 Q2 FY 15 Q2 FY 16 Q2 FY 15 Q2 FY 16 Strong Production growth
Slide 21: Copper: Financial Performance
Copper: Financial Performance Net Sales (` Cr) EBIT (` Cr) 5,247 4,757 414 4,614 344 350 Q2 FY15 Q1 FY16 Q2 FY16 Q2 FY15 Q1 FY16 Q2 FY16 Consistent Performance
Slide 22: ABML Update
ABML Update Mt Gordon mine operation sold to Lighthouse Minerals for a consideration of A$15 Mn (A$5 Mn upfront and A$10 Mn deferred and contingent) Transaction releases A$41.7 Mn of encumbered cash for ABML Strategic options, including a sale of ABML, being considered; Financial Advisor appoi
Slide 23: In Summary …
In Summary … Strong operational performance in Q2FY16, but external environment worsened further New factories ramping up well, Depreciation & Interest have eroded bottom line Copper business likely to maintain its performance on the back of robust operations and favourable value drivers Novelis’ st
Slide 24: 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 25: Thank you
Thank you REGISTERED OFFICE Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030 Telephone- +91 22 6662 6666 Website www.hindalco.com E mail hindalco@adityabirla.com Corporate Identity No. L27020MH1958PLC011238
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