Slide 1: HEG Limited Q3 & 9M FY2012 Results Presentation
HEG Limited Q3 & 9M FY2012 Results Presentation
Slide 2: Introduction
Introduction Leading manufacturer and exporter of graphite electrodes in India One of the lowest cost producers of graphite electrodes Strong presence in value added Ultra High Power (UHP) segment Diversified customer portfolio - POSCO, US Steel, Arcelor Mittal and Nucor Corp Graphite electrodes man
Slide 3: Sector Perspective
Sector Perspective CY 2011 world crude steel production increased by 6.8% at record levels of 1,527 Mt (Source: World Steel Association) 2012 expected to witness strong rise in steel demand 2012 growth rate expected to be at 6% (Source: World Steel Association) Steel growth may moderate on account o
Slide 4: Sector Perspective
Sector Perspective Graphite Electrode Pricing – Healthy price increase being realized Graphite Electrode price increase expected to add to margins after absorption of cost increases Needle Coke – Contracts for CY 2012 finalized at increased but competitive pricing Healthy Needle Coke stocks at old p
Slide 5: Expansions – Graphite Electrodes
Expansions – Graphite Electrodes Graphite Electrodes capacity expansion to 80,000 tons completed HEG becomes the world’s largest single-site producer Low cost, Brownfield expansion State-of-art, integrated facility Economies of scale to improve further Commercial production to commence post trial ru
Slide 6: Performance Perspectives
Performance Perspectives Growth and solid operational performance in Q3 FY2012 attributed towards: Optimized product mix leading to record capacity utilization over 100% High capacity utilization rates expected to sustain Expected growth in steel demand to support graphite electrode production Expor
Slide 7: Performance Perspectives
Performance Perspectives Financial highlights Realizations of graphite electrodes move upward, in line with expectations Needle Coke pricing fixed at increased but competitive pricing Exceptional items represents FX realization losses on Hedges and Foreign currency borrowings; trend to be determined
Slide 8: Highlights
Highlights Net Sales in Q3FY2012 enhance by 35% at ` 418.0 crore as compared to ` 310.3 crore in Q3 FY2011 EBIDTA in Q3 FY2012 increases by 38% at ` 91.1 crore from ` 66.2 crore EBIT in Q3 FY2012 higher by 47% at ` 76.5 crore from ` 52.0 crore EBT (before exceptional items) in Q3FY2012 rises by 50%
Slide 9: Management views
Management views Commenting on the results, Mr. Ravi Jhunjhunwala, Chairman and Managing Director, HEG Limited, said: “I am pleased to share with you that we have successfully achieved our graphite electrode capacity expansion to 80,000 tons, making us the world’s largest single-site manufacturing f
Slide 10: Management views
Management views Commenting on the results, Mr. Manvinder Singh Ajmani, Chief Financial Officer, HEG Limited, said: “The quarter under review displays a positive operating performance in both, the graphite electrodes and power divisions. Graphite electrodes volumes, pricing and realizations continue
Slide 11: Financial performance – A review
Financial performance – A review Revenues: Net Revenues increased by 35% at ` 418.0 crore in Q3 FY2012 as compared to ` 310.3 crore in Q3 FY2011 Volumes expected to maintain momentum Particulars (` crore) Q3 FY2012 Q3 FY2011 Shift (%) 9M FY2012 9M FY2011 Shift (%) Net Revenues: 418.0 310.3 35.0 1,01
Slide 12: Financial performance – A review
Financial performance – A review Total Expenditure: Needle coke prices remain stable during the CY 2011. Contract for 2012 finalized at increased but competitive prices Other raw material costs were also higher Interest cost has increased due to increased spreads; on account of tighter liquidity sit
Slide 13: Financial performance – A review
Financial performance – A review EBIDTA: EBIDTA increased by 38% at ` 91.1 crore in Q3 FY2012 from ` 66.2 crore in Q3 FY2011 Q3FY2012 margins sustained on back of higher sales Particulars (` crore) Q3 FY2012 Q3 FY2011 Shift (%) 9M FY2012 9M FY2011 Shift (%) EBIDTA before exceptional items 91.1 66.2
Slide 14: Financial performance – A review
Financial performance – A review Profit Before Tax in Q3 FY2012 increased by 50% at ` 62.8 crore as compared to ` 42.0 crore in Q3 FY2011 In Q3 FY2012, the Company reported a forex loss of ` 35.5 crore mainly on account of translation losses on hedges and foreign currency borrowings 9M 9M Shift (%)
Slide 15: Segmental results – Graphite electrodes
Segmental results – Graphite electrodes Revenues rose by 34% at ` 404.0 crore in Q3 FY2012 as compared to ` 301.9 crore in Q3 FY2011 due to higher volumes Capacity utilization at all-time high on optimized product mix; in line with growing demand Growth in steel production through the EAF continues
Slide 16: Segmental results - Power
Segmental results - Power Revenues were higher by 29% at ` 64.5 crore in Q3 FY2012 from ` 50.2 crore in Q3 FY2011 Earnings performance influenced by Contained costs on account more efficient generation Contribution from the hydel power plant at Tawa 3 power plants under operation with a total capaci
Slide 17: In summary
In summary Expansion to 80,000 MT capacity complete; test runs are being conducted To augment performance once implemented Volatility in global macro economics to continue Uncertainty in Euro zone debt crisis impacts business visibility Graphite Electrode outlook is encouraging Performance of the St
Slide 18: In summary
In summary Operational performance to continue to be positive Volume growth is visible Model remains focused and robust HEG has secured its place as the world’s largest single site producer of graphite electrodes Economies of scale and low cost production are the key points by which the Company bene
Slide 19: Disclaimer
Disclaimer Statements in this document pertaining to future status, events, or circumstances, including but not limited to statements about plans and objectives, potential product characteristics and uses, product sales potential and target dates for product launch are forward-looking statements bas
Slide 20: About HEG Limited
About HEG Limited HEG Limited, a listed company of the LNJ Bhilwara Group, was established in 1977 in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie (SERS), a subsidiary of Pechiney of France. The Company has recently expanded Graphite Electrode capacities f
Slide 21: About Graphite electrodes
About Graphite electrodes Graphite electrodes find their biggest industrial use in Electric Arc Furnaces (EAF) used in steel plants to melt steel scrap. The demand for graphite electrodes is therefore sensitive not to steel prices but to steel production volumes through the EAF route, which accounts
Slide 22: Contact details
Contact details For further information, please contact: Manvinder Singh Ajmani – CFO Janki Dholakia HEG Limited Citigate Dewe Rogerson Ph: +91 120 244 4541, 439 0224 Ph: +91 22 6645 1217 Fax: +91 120 254 1575 Fax: +91 22 6645 1213 Email: manvinder.ajmani@lnjbhilwara.com Email: janki@cdr-india.com S