hindalco industries ltd board meeting · 2015. 3. 19. · nifty sulfide production declined 24%…...
TRANSCRIPT
Hindalco Industries LtdInvestor Presentation
Q1 FY12
2
Performance Review
Presentation Structure
Projects Update
Highlights
Highlights – Q1 FY12
3
Despite strong Cost Push & adversities
Momentum continues …
Strong Performance by Novelis
Projects progressing
EBITDA
PAT
EPS
16%
21%
20%
1,045
644
3.4
NET SALES 6,03116%
0
200
400
600
800
1000
1200
FY11 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY12 Q1
901
780 801
1020
1045
(EBITDA, ` Cr)
Highlights - Improving Trend…
4
Disruptions at Hirakud
& Dahej
Key Business Drivers and Impact
Driver Change ( %) Impact
Aluminium LME
Average($/ton)24
Copper TC/RC
Benchmark (c/lb)22
Exchange
Rate (`/$)(2)
Coal India
Prices30%
Crude derivatives >20%
5
Financial Performance
6
` Cr Q1 FY11 Q1 FY12 Change (%)
Net Sales 5,178 6,031 16
PBITDA 901 1,045 16
PBT 673 803 19
PAT 534 644 21
EPS (`) 2.8 3.4 20
Other income higher by `109 crs reflecting higher treasury corpus
and yield ; and `69 crs dividend from ABML
Performance Review
7
Al: Supportive LME but ….
8
2096 2089 2343 2500 2603
95,481 97,097
1,05,110
1,13,1761,16,387
60000
70000
80000
90000
100000
110000
120000
1200
1400
1600
1800
2000
2200
2400
2600
2800
Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12
LME$/t `/t
But there were many challenges …
Across the board increase in key input prices
India specific challenges:
Coal cost increase
Uncertain regulatory regime
0
500
1000
1500
2000
2500
2001 2005 2010 Mid-2011
1,018
1,328
1,650
2,015
1,288
1,693
2,031
2,400
Average 90th Percentile
Cost pressures: A Global Phenomenon …
9
Energy
Carbon
Alumina
Shifting Global cost curve
($/ton of Aluminium)
Upward trend likely to continue for smelters that depend upon
external energy / alumina sources
(Source: Industry Estimates)
Aluminium:
10
341 335
Q1 FY11 Q1 FY12
Alumina (kt)
140 140
Q1 FY11 Q1 FY12
Aluminium (kt)
69.93
Production
19 22
3637
Q1 FY11 Q1 FY12
Specials
Standard
87.8% 90.4%
Q1 FY11 Q1 FY12
Export
Domestic
Increase in Hydrate / Alumina sales
with continued focus on specials
Maximized domestic
sale of metal …
55 kt59 kt
Aluminium Business: Financial Performance
11
Q1 FY11 Q1 FY12 Change
(%)
Net Sales &
Operating Revenue1,867 2,093 12.1
EBIT 552 599 8.5
(` cr)
Input cost pressures & stronger rupee partly negated the gains of
strong LME….
Downstream sales were lower due to sluggish demand and
Alupuram lock-out since Feb 2011.
Novelis Update (Q1 FY12)
12 Record First Quarter Results
Shipments Up 3% to 767 Kilotonnes
Net Sales Up 23% to $3.1 Billion
Record Adjusted EBITDA Up 16% to $306 Million
Free Cash Flow Before CapEx of ($127) Million
Liquidity of $865 Million
Net Income of $62 Million
(Millions)
Novelis : Adjusted EBITDA Trend
Driving Consistent & Predictable Results
263
291
238
280
306
$800
$850
$900
$950
$1,000
$1,050
$1,100
$1,150
$0
$50
$100
$150
$200
$250
$300
$350
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
TTM EBITDAQuarterly EBITDA
Qu
art
erl
yT
TM
Copper: Operational Performance
76
73
Q1 FY11 Q1 FY12
Cathode Production (kt)
Copper production down 3kt
~20 kt output lost due to shutdown
14
17% higher EBIT (YOY) despite volume loss….
• Improved Tc/Rc
•Improved operating efficiencies
•Higher DAP realisations…
………Resulted in improved
financial performance
despite……
…Cost pressures & higher
working capital requirement….
Copper: Financial Performance
15
Q1 FY11 Q1 FY12 Change
(%)
Net Sales &
Operating Revenue3,314 3,940 18.9
EBIT 124 145 16.8
(` cr)
ABML Update
16
Nifty Sulfide Production declined 24%…
15,665
11,888
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q1 FY11 Q1 FY12
Copper in Conc. (tons)
… Due to a sharp decline in head
grade, which is in line with the mine
plan
1.0
2.0
3.0
Q1 FY11 Q1 FY12
3.05
2.20
Copper Grade (%)
• Copper prices remained strong
•Mt Gordon operations have re-started and production ramp up is
progressing
• Cost pressures and AUD strength are key challenges
28%
Key External Drivers - Outlook
17
Driver Current Assessment Impact
LME • Investor appetite is supportive, but concerns
galore
INR USD • Uncertainty over FII flows may hold rupee
appreciation, despite general USD weakness
Energy,
Input prices
• Upward pressure related to coal and carbon costs
TcRc • 2011 terms likely to be favourable to smelters vis-
à-vis last year
By products • Acid prices have firmed up, DAP subsidy
announced is higher
Projects Update
18
Greenfield Projects Update
Project ProgressExpected
completion
Mahan Aluminium, MP
• Project finance completed (contracted debt `7,875 Cr)
• Drawdown till date: ` 3,400 crs• 17,000 people at site• Forest clearance for coal block ,tapering linkage applied
First Metal End 2011
Utkal Alumina, Orissa
• >9,000 people at site• Project finance completed (debt tied up ` 4,906 Cr)
• Drawdown till date over ` 2,200 crs
Second half 2012
Aditya Aluminium, Orissa
• Forest Stage-II clearance received • Site activities at advanced stage• Financing option under evaluation
Early 2013
Aditya Refinery, Orissa
• Majority land acquired• Water drawl agreement obtained 2014
Jharkhand Aluminium
• Land acquisition started• Coal mine allotted jointly
2015
19
Activity at Project Sites Mahan Smelter
20
GTC1 ID Fan foundations & Stack :
Pot room “A” inside view Cathode Sealing Shop-Eqpts. Cmmnsg.
Pot Annexe bldg. and PTMs erection Smelter Overview
Activity at Project Sites Mahan CPP
21
Power House Building CHP Crusher and Stacker Reclaimer
Power Plant ViewPlacing of Stator #2 on position
Activity at Project Sites Utkal Refinery
Predisilication Area Ball Mill Erection
Captive Power Plant Calciner Erection
Update on Projects: Brownfield
Project Scope Expected completion
Hirakud expansion Smelter: 155 to 213 ktpa Early 2012
FRP, Hirakud
Transfer from Novelis UK plant
to produce a wide product
range including can body stock
End 2011
Pinda (Brazil)Significant increase in FRP
capacity to 600 ktpaEnd 2012
Korea expansion
Addition of 350kt increases
the annual capacity to
1,000kt
End 2013
Oswego, North
America expansion
Additional capacity of 200 kt
for automotive applicationsMid 2013
23
FRP - HirakudCold Mill Bay-Crane ErectionCold Mill Base Frame Erection
Hot Mill Table Roll FoundationHot Mill Bay
Pinda, Brazil Mill Expansion
Thank you
26
27
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 company’s
operations include global and Indian demand supply
conditions, finished goods prices, feed stock availability and
prices, cyclical demand and pricing in the company’s principal
markets, changes in Government regulations, tax regimes, economic
developments within India and the countries within which the company
conducts business and other factors such as litigation and labour
negotiations. The company assume no responsibility to publicly
amend, modify or revise any forward looking statement, on the basis of
any subsequent development, information or events, or otherwise.
Forward Looking & Cautionary Statement
Aluminium Production
In Tonnes Q1FY11 Q1FY12 Variance
Alumina 341,419 334,587 -2%
Metal 140,061 140,387
FRP 51,373 49,544 -4%
Extrusions 9,617 7,321 -24%
Foil 4,781 4,750 -1%
Wire Rods 23,326 23,403
Copper Production
Production lower due to bi-annual shutdown
Production Units Q1 FY11 Q1 FY12 % chg
Copper Cathodes MT 76,309 73,192 -4%
CC Rods : Own MT 40,708 33,701 -21%