06 November 2012

Hindalco announces Q2 FY 2012-13 standalone results (unaudited)
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Hindalco, the Aditya Birla Group flagship company today announced its unaudited results for the quarter ended September 30, 2012.

Its revenue from operations for the current quarter was marginally higher on a sequential basis led by improved volumes in both of its businesses. EBITDA grew significantly higher at Rs.515 crore over Rs.463 crore in Q1FY13. This has been driven by better realisation and higher volumes. That despite the continuing increase in input costs, Hindalco has put in a robust performance, is indeed commendable. The successful ramp-up of its smelter post the shutdown in Q1FY13 at its Copper Plant also bolstered the results.

Other income for Q1FY13 included dividends of Rs.130 crore received from its subsidiaries. Finance costs are lower for the quarter ended 30th September 2012 due to repayment of a loan carrying high interest rate.

Business results
The result for the quarter demonstrates the inherent strength of the company’s strategy of maintaining a derisked business portfolio. Superior performance in the Copper business during this quarter more than offset the headwinds faced by the Aluminium business, leading to a better overall operational performance.

Aluminium
Of the total revenue of Rs.6,164 crore, Aluminium business contributed Rs.2,105 crore vs. Rs.2,063 crore in Q1FY13. Sales were higher due to increased volume of value-added downstream products and better metal premium realised by the company.

In the Aluminium segment, results were impacted by operational disturbances in both the smelters of the company. The total metal production stood at 128 Kt for the quarter compared to 132 Kt in Q1FY13 although sales of downstream products rose to 62 Kt from 58 Kt in Q1FY13. Alumina production was also lower at 328 Kt versus 335 Kt in Q1FY13, primarily due to lower production at the Belgaum refinery reflecting the constraints in the availability of bauxite for this plant. Continuing cost pressures, particularly in case of coal and caustic soda, also strained the results.

The capital employed in the Aluminium business of the company stood at Rs.28,850 crore as on September 30, 2012, which includes around Rs.19,300 crore relating to the Greenfield projects, viz., Mahan, Hirakud Rolled and Aditya Aluminium projects.

Copper
In the Copper business, revenue for the quarter was up at Rs.4,066 crore vs. Rs.3,972 crore in Q1FY13, bolstered by better operational performance, increased volume, improved by-product realisation and weaker Rupee. The EBIT of the Copper business soared by 175 per cent to Rs.209 crore vs. Rs.76 crore in Q1FY13.

Cathode production went up to 78 Kt as against 69 Kt in Q1FY13. The value-added CCR production marginally rose to 37Kt from 36 Kt in Q1FY13.

The capital employed in Copper business remained unchanged at Rs.6,200 crore.

Financing
A common loan agreement for Rs.9,896 crore was signed by the company on 17th September 2012 for its Aditya Aluminium project, with a group of 28 banks / financial institutions. With this facility, the financial closure of Aditya Aluminium project has been achieved.

Greenfield projects
There is no material adverse development to report since the last quarterly press release, although there may be a little delay from the earlier estimated timelines.

Mahan Coal
Pursuant to the Group of Minister’s recommendation, Mahan Coal Ltd, a joint venture between Essar Energy and Hindalco has been granted Stage 1 forest clearance from the Government of India’s Ministry of Environment and Forests (MoEF) for its Mahan Coal block. This clearance is considered a major milestone in the process, which will ultimately lead to supply of coal from this Coal Block to the Captive Power Plant of Mahan Aluminium project.

Company outlook
The general slowdown coupled with the stubborn high cost of inputs may impact the business results of the company in the near future. However, the company would continue to take proactive steps to extract maximum value from the various drivers of its businesses. The company is equally focused on successful implementation and commissioning of its various Greenfield projects.

Statements in this “Press Release” describing the company’s objectives, projections, estimates, expectations or predictions 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.