Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q4 FY10 Earnings Presentation
40 slides from Hindalco Industries's earnings presentation, May 20, 2010
Slide 1: Hindalco Industries Ltd Q4 FY10 Investor Presentation
Hindalco Industries Ltd Q4 FY 10 - Investor Presentation
Slide 2: Economy & Industry Performance Highlights Projects
Economy & Industry Performance Highlights Projects Financials 2
Slide 3: Performance Highlights
Performance Highlights ¾ Strong Operating Performance ¾ Highest ever Production. YOY.. ¾ Alumina up 6% ¾ Aluminium up 6% ¾ Copper up 12% ¾ Better geography and product-mix ¾ Cost of production brought down despite input cost pressures ¾ Greenfield projects remain on track, facilitated by various fin
Slide 4: Economic Backdrop
ADITYA A Economic Backdrop
Slide 5: Economic recovery gathered momentum
Economic recovery gathered momentum GDP Growth (%) G-7 China y IMF expects world GDP growth to bounce back to 4.2% 11.9 3.6 in 2010 after (0.6)% in 2009 y It’s a ‘multi-speed’ recovery o US returning to ~3% growth o Europe languishing at ~0-1% 6.2 o China +10%, India +8% y Concerns over fiscal defic
Slide 6: India: Growth has bounced back
India : Growth has bounced back Aluminium consumption (kt) Industrial Growth (%, yoy) 1529 35400 36293 1196 15.1 2.5% 27.8% 9.3 Copper consumption (kt) -0.2 636 17065 17185 563 0.7% 13% 6
Slide 7: Al 2010: Rebound in world consumption
Al 2010: Rebound in world consumption Leading Indicators Positive… World Aluminium Consumption: Rebound from demand destruction Rising above 100 (kt) 13.7% for last 5 months 37419 8.3% 39001 RoW 34302 Oth. Asia India +14% China +18% Europe Global Mfg PMI +9% 57.8 N America Apr +11% - Asia driving gr
Slide 8: Al: Surplus continues
Al: Surplus continues… World Aluminium Production (kt) 11.3% Stocks have remained at elevated 6.1% 41927 levels, though steady for last 3 qtrs … 40131 RoW 37670 LME Exch. stocks -8% (mn ton) ($/t) 2324 N America, Europe 4.70 ~0% India, ME +29% 3.97 1421 China +27% 8
Slide 9: Al: Positive trend yet concerns remain
Al : Positive trend yet concerns remain… Sustaining Risk the trend factors - Marginal cost estimated around $2000/t, - Reversal of financing deals possible - Cost push: alumina and when interest rates rise / contango energy prices shrinks - Positive investor - Risk aversion ~ sovereign credit risk s
Slide 10: Copper: Still strong as mine supply lags behind
Copper: Still strong as mine supply lags behind LME Exch. stocks ($/t) (kt) y LME driven up by investors and improving economy, despite rising stocks y World consumption projected to rise 8% in 2010 to 18 mn ton; surplus to shrink to 162 kt Global Mine Supply Deficit (kt) from 1,404 kt in 2009 (CRU)
Slide 11: Domestic Industry: Stronger rupee and cost pressures
Domestic Industry: Stronger rupee and cost pressures Hardening Rupee Cost pressures from rupee inflation y Inflation in India was 9.9% during FY10 vs. 0.3% in the US y On average, Rupee depreciated by just 3.1% (45.92 to 47.39) in FY10 ⇒ Real appreciation of INR by >6% during FY10 Relative Movement
Slide 12: Performance Review - Aluminium
Performance Review - Aluminium 12
Slide 13: Highlights – FY10: Best ever operational performance
Highlights – FY10 ¾ Strong Operating Performance ¾ Highest ever alumina & aluminium Production ¾ Aluminium capacity Up by 8 ktpa ¾ Better geography and product-mix ¾ Cost of production brought down despite input cost pressures ¾ Greenfield projects remain on track, facilitated by various financing i
Slide 14: Production Performance: FY10
Production Performance: FY10 Metal (kt) 555 6% 23% 6% 523 FY09 FY10 FRP (kt) ¾Higher Alumina and 13% 205 Metal Production on the 8% 182 back of brownfield expansions ¾Increased volumes of FY09 FY10 downstream value added 14 products
Slide 15: Production Performance: Q4 FY10
Production Performance: Q4 FY10 343,801 Alumina 138,023 Metal Wire Rod 23,177 4% 14% 8% 318,325 133,179 20,264 Q4 FY09 Q4 FY10 Q4 FY09 Q4 FY10 Q4 FY09 Q4 FY10 47,781 FRP Extrusion 9,751 ¾All round improvement 7,115 8% 8% in production 44,310 ¾Higher VAP Production Q4 FY09 Q4 FY10 Q4 FY09 Q4 FY10 15
Slide 16: Sales: Optimizing to deliver
Sales : Optimizing to deliver FY09 ¾Improved Product Mix 59% 60% 40% 41% FY10 Primary VAP 44% 43% ¾Improved Market Mix 57% FY09 56% Primary VAP 68% FY10 32% 18% Domestic Export 82% 16 Domestic Export
Slide 17: Sales Volumes: Q4 FY10
Sales Volumes: Q4 FY10 Chemicals 67,133 Extrusions 51% 10,595 8,073 44,363 31% FRP 45,952 4% 40,931 Q4 FY09 Q4 FY10 Q4 FY09 Q4 FY10 Q4 FY09 Q4 FY10 ¾Robust growth in all product segments 17
Slide 18: Aluminium Business – Financial Performance
Aluminium Business – Financial Performance (Rs cr) Q4 FY09 Q4 FY10 Change Net Sales & 1,561 2,045 31% Operating Revenue EBIT 163 614 278% FY09 FY10 Change Net Sales & 7,604 7,001 (8)% Operating Revenue EBIT 2,158 1,767 (18)% 18
Slide 19: Continued to outperform Peers
Continued to outperform Peers… Earnings Movement (Performance for FY10 / 2009 indexed to LY = 100) 55 48 34 82 15 17 (238) Global Global Global Global Global Global HIL - Al Peer1 Peer2 Peer3 Peer4 Peer5 Peer6 ………. 2009 vs. 2008 ………. …………….. FY10 vs. FY09 ………….. 19 Note: All figures in primary curre
Slide 20: Performance Review - Copper
Performance Review - Copper 20
Slide 21: Highlights – FY10
Highlights – FY10 ¾ Highest ever copper production ¾ Improved operational efficiencies & continued cost reduction focus ¾ Strong Financial Performance despite adverse Industry dynamics ¾ Commissioning of CCR-II, copper rod facility ¾ Better geographical and product-mix 21 Best ever operational perfo
Slide 22: Operational Performance: FY10
Operational Performance: FY10 CC Rods (Own) Sulfuric Acid (kt) 12% 131 7% 4% 1,043 7% 122 999 FY09 FY10 Production growth despite 16 kt copper output lost in Q4 due to annual shutdown (38 days) in Cu-I (kt) Q4 FY09 Q4 FY10* Q4 FY10* Decline in Cathode 87 75 production due to Planned shutdown CCRods
Slide 23: Copper Business – Financial Performance
Copper Business – Financial Performance (Rs cr) Q4 FY09 Q4 FY10 Change Net Sales & 2,213 3,361 52% Operating Revenue EBIT 51 127 150% FY09 FY10 Change Net Sales & 10,625 12,542 18% Operating Revenue EBIT 379 660 74% 23 Complimentary Business Portfolio model vindicated
Slide 24: Projects
Projects ADITYA A
Slide 25: Hirakud Smelter and Power Plant Expansion
Hirakud Smelter and Power Plant Expansion Smelter Capacity increase from 161 to 213 KTPA through addition of Expansion 80 Pots of 235 kA Power Plant Capacity to increase to 467.5 MW by Addition of 100 MW. Expansion Project 30 pots to be commissioned by Dec’2011 & balance 50 pots by Schedule Mar’2012
Slide 26: Greenfield Project – Utkal Alumina
Greenfield Project – Utkal Alumina Engineering Basic Engg-100 % Complete, Detailed Engg- 89% Completed Statutory Obtained Clearances Commitment 81% committed All major orders placed Site Progress More than 5,000 people working at site Major Contractors like L & T, Simplex, GDC mobilized fully at sit
Slide 27: Greenfield Project – Utkal Alumina
Greenfield Project – Utkal Alumina Q4 FY09 Q4 FY10 27
Slide 28: Greenfield Project – Mahan Aluminium
Greenfield Project – Mahan Aluminium 73% committed 6500 28 Project Commissioning – Q2 FY12
Slide 29: Mahan Smelter – Progress on ground
Mahan Smelter – Progress on ground Pot room”A” Mech. & Elect. Work shop Sub-station east Pot line Anode paste plant bldg. 29
Slide 30: Mahan CPP – Progress on ground
Mahan CPP – Progress on ground Chimey #1: RCC Shell in progress Boiler #1: Structural erection in progress TG#1 RCC Columns: Reinforcement and ESP #1: Structural erection in progress shuttering in progress 30
Slide 31: Greenfield Project – Aditya Smelter
Greenfield Project – Aditya Smelter Engineering Basic Engg-nearing completion, Detailed Engg- 52% complete. Statutory Major approvals received. Forest land stage I clearance Clearances received. Permission to start project site consolidation activities received. Stage II clearance is pending. Commit
Slide 32: Aditya Smelter & CPP – Progress on ground
Aditya Smelter & CPP– Progress on ground PPC Pipe Culvert: Main Entrance Pot Room 2 site GTC Site Office under construction GTC Area Store under construction 32
Slide 33: Brownfield Project: Can Body stock at Hirakud (Project Blue Fox)
Brownfield Project: Can Body stock at Hirakud (Project Blue Fox ) Dismantling of assets at Dismantling more than 65 % complete. To be completed by July 2010 Rogerstone 250 containers ( ~20 MT each) dispatched from site( Total scope – 450 no) Receipt of & around 100 no of containers received in India
Slide 34: Jharkhand Smelter
Jharkhand Smelter Land Total land requirement of ~4000 acres for the project. Land has been identified. Briefing the villagers about the R & R scheme is going on at site, for acquiring private land. Application for acquisition of government land submitted. Water Water drawl clearance received for 55
Slide 35: Aditya Refinery
Aditya Refinery Land Land required for the project is ~ 1881 Acres. 1387 Acres of land registered in name of company, process for balance land is in progress. Water Water drawl agreement to draw upto 10.42 cusecs obtained Forest Stage-I clearance recommended by the DFO, Conservator clearance and CCF
Slide 36: Financials
Financials ADITYA BIRLA
Slide 37: Financial Performance - FY10
Financial Performance - FY10 Rs Cr FY09 FY10 Change Net Sales 18,220 19,536 7% EBIDTA 3,036 2,950 (3)% PBT 2,690 2,265 (16)% PAT* 2,230 1,916 (14)% EPS 14.82 10.82 (27%) *Other income lower by Rs 377 Cr due to lower treasury corpus post Novelis bridge loan spending and higher project spend Includes
Slide 38: Key Financials – Q4 FY10
Key Financials – Q4 FY10 Rs Cr Q4 FY09 Q4 FY10 Change Net Sales 3,772 5,404 43% EBIDTA 314 835 166% PBT 159 674 323% PAT* 269 664 147% EPS (Rs) 1.58 3.47 120% Due to early adoption of AS-30, the figures of the current periods are not comparable with corresponding periods in the previous year *PAT –
Slide 39: Thank you
Thank you ADITYA BIRLA \
Slide 40: 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