30 January 2008
Hindalco
announces Q3 FY 2008 results
Click
here to view the results
| Revenues |
Rs.
4,532 crore |
| EBITDA
|
Rs.
915 crore |
| PAT
|
Rs.
543 crore |
| (In
Rs. crore) |
Quarter
ended
31 Dec 2007
|
Quarter
ended
31 Dec 2006
|
Nine
months
ended
31 Dec 2007
|
Nine
months
ended
31 Dec 2006
|
| Net
sales and operating revenue |
4,531.7
|
4,656.2
|
14,169.3
|
13,564.1
|
| Other
income |
114.3
|
58.4
|
348.7
|
246.8
|
| EBDITA |
914.9
|
1103.7
|
2,955.3
|
3,211.9
|
| Depreciation |
146.0
|
138.4
|
433.4
|
480.5
|
| Interest
and financing charges |
62.2
|
69.8
|
181.6
|
184.7
|
| Profit
before tax (PBT) |
706.7
|
895.5
|
2,340.3
|
2,546.7
|
| Provision
for taxes |
164.0
|
251.6
|
551.9
|
703.7
|
| Net
profit |
542.7
|
643.9
|
1,788.4
|
1,843.0
|
| EPS |
4.4
|
6.5
|
15.6
|
18.7
|
Hindalco
Industries Ltd., the flagship company of the Aditya Birla Group,
today announced its unaudited financial results for the quarter
ended December 31, 2007.
Net sales and operating revenues stood at Rs. 4,531.7 crore
as compared to Rs. 4,656.2 crore in the corresponding period
in FY 07. The net profit for the quarter is Rs. 542.7 crore
vis-à-vis Rs. 643.9 crore in the corresponding period
of previous year.
These results need to be viewed in the context of macro-economic
parameters as these adversely impacted the quarter under review.
Domestic aluminium ingot prices are down by around 20 per cent
due to the rupee appreciation. A 10 per cent lower aluminium
LME, 41 per cent lower Tc/Rc in copper and soaring international
crude prices have exerted considerable pressure on margins.
This was mitigated to some extent by sweating capacities, improving
realization through an enriched product/market mix, optimising
efficiency levels and producing highest ever aluminium metal
in a quarter.
Of the total revenues of Rs. 4,531.7 crore, the aluminium business
contributed Rs. 1,729 crore. Aluminum metal sales volume rose
by 12 per cent along with higher proportion of value added products.
The profit before interest and tax for aluminium business was
at Rs. 578.9 crore as against Rs. 755.5 crore in the corresponding
quarter in the earlier year, as stated earlier, mainly due to
the rising Rupee and fall in global alumina realisation.
In the copper business, revenues stood at Rs. 2806.2 crore driven
by higher sales volumes and an enriched product mix. The profit
before interest and tax was Rs. 94 crore against Rs. 159.5 crore
in the corresponding quarter last year.
As mentioned earlier, a 41 per cent lower TcRc and lower duty
differential on imports constrained the copper business. The
effect of these were partially offset by improvement in the
market mix with higher sales in domestic market, lower grid
power usage on improved captive power availability, energy consumption
and better realisation from by-product sale. Moreover, steep
appreciation of Indian Rupee against US Dollar adversely impacted
segment results of copper by an estimated Rs. 54 crore for the
quarter under review as a result of restatement of net foreign
currency exposures as on 31 December 2007. For the corresponding
quarter of the previous year, this had an estimated favourable
impact of Rs. 86 crore on such results. Consequently, the copper
segment results for the quarter under review are lower than
the corresponding quarter of the previous year by an estimated
non-cash impact of Rs. 140 crore on this account.
Operational review
Aluminium
All the aluminium plants operated at consistently high capacity
utilisation. Brownfield expansions have resulted in increasing
metal production by 9 per cent. The downstream assets purchased
in the last two years are fully utilised, in addition to consistent
production from other plants. Production of value added products
(VAP) viz. rolled products and extrusions production extended
by 6 per cent and 10 per cent respectively. Alumina production
was marginally less than last year predominantly due to the
hooking of existing alumina refinery with expanded facility
at Muri.
|
Production
|
Units
|
Q3
FY08
|
Q3
FY07
|
Nine
months
ended
31 Dec 07
|
Nine
months
ended
31 Dec 06
|
| Alumina |
MT
|
304,059
|
308,344
|
888,781
|
902,247
|
| Primary
metal |
MT
|
121,971
|
111,871
|
356,397
|
328,351
|
| Wire rods |
MT
|
18,458
|
17,777
|
53,922
|
52,050
|
| Rolled
products |
MT
|
59,365
|
58,000
|
174,404
|
162,766
|
| Extruded
products |
MT
|
11,472
|
10,364
|
32,765
|
28,757
|
| Foils |
MT
|
6,474
|
6,235
|
18,655
|
19,555
|
| Wheels |
Nos.
|
41,368
|
51,364
|
127,520
|
151,428
|
| Power |
MU
|
2,149
|
2,089
|
6,415
|
6,241
|
Copper
Copper cathodes and CC rods production increased by 7 per cent
and 38 per cent respectively on YoY basis on the back of the
ramp up of the copper-III smelter and consistent production
from smelter-I. The operations at copper smelter –II continue
to be suspended.
|
Production
|
Units
|
Q3
FY08
|
Q3
FY07
|
Nine
months
ended
31 Dec 07
|
Nine
months
ended
31 Dec 06
|
| Copper
Cathodes |
MT
|
78,333
|
72,904
|
236,748
|
208,965
|
| CC
Rods |
MT
|
34,471
|
24,942
|
103,901
|
78,958
|
Expansion
projects
Muri
The expansion of the Muri Alumina refinery from 110,000 tpa
to 450,000 tpa is under commissioning in a phased manner.
The entire steam and power requirement is being met by the
new captive power plant. The production from the expanded
facility is expected to be stepped up progressively in Q4FY08.
Hirakud
Phase II of the expansion of the smelting capacity from 100,000
tpa to 143,000 tpa is on track. The scaling up of the power
generation capacity from 267.5 mw to 367.5 mw will go on stream
by the fourth quarter of this fiscal.
Belgaum
The allotment of the lease for bauxite mines for expanding
the alumina refinery capacity at Belgaum, Karnataka from 350
ktpa to 650 ktpa is awaited.
Aditya
Aluminium
Aditya Aluminium, the integrated aluminium project, encompassing
1-1.5 million tpa alumina refinery, 260,000 to 325,000 tpa
aluminium smelter and 750 mw captive power plant is progressing
as planned. The major portion of the total land required for
the project has been acquired. Environmental clearances have
been obtained for the smelter, the captive power plant (CPP)
and the refinery. Joint venture company is formed for the
coal block. The water drawal agreement is also finalised.
Construction power already in place, the regulatory clearances
obtained for transmission lines for operation power. The smelter
is expected to be commissioned by March 2011 and the refinery
by May 2011.
Mahan
The Mahan Aluminum project with a smelter capacity of 325
ktpa and CPP of 750 mw is on schedule. The land acquisition
for the project is underway. The company has been allotted
a coal block in a JV with the Essar Group for the coal requirement
of the CPP. Preliminary environmental clearances have been
obtained. The power connectivity for commencing construction
has been approved. The water resource department has provided
the necessary facilities as well. The production of coal is
likely to start by October 2009. The smelter is expected to
roll on by September 2012.
Latehar
For the Latehar project with a smelter capacity of 325 ktpa
and CPP of 750 mw, tubed coal mine has been allocated jointly
with Tata Power. Preliminary environmental clearances have
been obtained. Land acquisition is in progress. Power for
construction activity is sanctioned. The expected date of
commissioning is September 2013.
Utkal
Work on Utkal Alumna’s 1.5 mtpa alumina refinery is underway.
The company has acquired the land for the plant and facilities.
Mining activities will start by March 2009. The civil works
for the alumina refinery and CPP is in progress. The commissioning
of the plant is expected by March 2010.
Hindalco
Almex Aerospace Limited
This project for manufacture of high strength aluminium alloys
for applications in the aerospace, sporting goods and surface
transport industries is on target. Key equipment has begun
to arrive at site for installation.
Industry
outlook
Aluminium
Global primary aluminium consumption has witnessed a strong
growth of 10 per cent from April through December 2007. US
production levels have seen a high growth but demand from
residential construction market and transport markets continues
to remain weak. Demand from Western Europe has been relatively
stronger due to firm transport and engineering markets. China
is the strongest driver of the demand as the metal grew at
34.7per cent in this period with demand from the power, transport
and construction markets bolstering growth.
Copper
The bullish run on the copper prices has been halted due to
global economic and financial woes and the trend is likely
to be downward. With many major smelters announcing annual
maintenance shutdown during April –June 2007, the availability
of concentrates would improve, resulting in a higher spot
TcRc.
Company
outlook
Going forward, higher volumes from asset sweating of existing
plants, the brownfield expansions and continued cost focus
together with effective working capital management to maximise
free cash flow will be the major growth drivers. However a
stronger Rupee will continue put pressure on the profit margins.
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