28 July 2008

Hindalco Industries Ltd. announced its unaudited financial results for the quarter ended 30 June 2008.

Net sales and operating revenues remained flat at Rs. 4647.5 crore, however the profit before depreciation, interest and tax grew by 16 per cent to Rs. 1,163.7 crore as compared to Rs. 1,005.7 crore in the corresponding period in FY 08. The profit after tax at Rs. 696.8 crore was up 16 per cent from Rs. 598.6 crore in Q1 FY08.

Of the total revenues of Rs. 4647.5 crore, aluminium business contributed Rs. 1943.0 crore. The profit before interest and tax for aluminium business was higher by 18 per cent from Rs. 638.2 crore to Rs. 750.4 crore in the corresponding quarter of the preceding year, driven by higher volumes and higher LME prices.

In the copper business, revenues were lower at Rs. 2706.6 crore against Rs. 2926.2 crore mainly on account of lower volumes due to a planned shutdown of smelter-1 at Dahej.

The steep depreciation of the Indian Rupee against the US Dollar affected the copper business by an estimated Rs. 151.9 crore for the quarter under review, as a result of restatement of net foreign currency exposures as on 30 June 2008. For the corresponding quarter of the previous year, this had an estimated favourable impact of Rs. 14.3 crore. Consequently, the PBIT of copper business is lower than the corresponding quarter of the previous year by Rs.166.2 crore.

The profit before interest and tax was lower at Rs. 74.3 crore from Rs. 112.3 crore in the corresponding quarter last year.

Operational review

Aluminium
The expansion at Muri and Hirakud has resulted in alumina production going up by 31 per cent at Muri and metal production by 24 per cent at Hirakud. The overall metal production was up by 7 per cent. The value added wire rods production was also up by 4 per cent.

At Mouda, production was lower due to stoppage of cold rolling mill.

Extrusions production rose by 8 per cent on back of the investments made in new presses in the last two years.

Copper
Copper cathodes production is lower due to the planned shutdown of smelter-1 in this quarter. The copper smelter –II operations continue to be suspended.

Cathode production reduced by 24 per cent to 60 kt. To maximize production of value added products, continuous cast rods production was curtailed only by 12 per cent to 30 kt.

Expansion projects

Muri
The expansion of the Muri alumina refinery from 110,000 tpa to 450,000 tpa is mechanically complete. Production is being ramped up 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 proposed to reach its full capacity by the end of the year.

Hirakud
Phase II of the expansion of the smelting capacity from 100,000 tpa to 143,000 tpa is on schedule. Its capacity has touched 122,000 tpa in this quarter and is expected to scale upto 143,000 tpa by August 2008. The power generation capacity has been raised from 267.5 mw to 367.5 mw. All the units have been commissioned.

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 still awaited.

Aditya Aluminium Project
Aditya Aluminium, the integrated aluminium project, encompassing 1 to 1.5 million tpa alumina refinery, 260,000 to 359,000 tpa aluminium smelter and 750 to 900 mw captive power plant is progressing as planned. A 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 alumina refinery. The water drawl agreement has also been executed. The construction power is already in place. The construction of transmission lines and upgradation of substations to draw power is in progress. The first metal from the smelter is proposed to be produced by October 2011. The refinery is proposed to be mechanically completed by January 2013. The technology contracts for the smelter and alumina have been executed with Aluminium Pechiney and Alcan respectively. The basic engineering activities for the smelter and CPP have commenced.

Mahan project
The Mahan aluminium project with a smelter capacity of 359 ktpa and CPP of 900 mw is on track. 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 expected to start by October 2009. The technology contract for the smelter has already been executed with Aluminium Pechiney. The first metal from the smelter is expected by July 2011 and basic engineering activities for the smelter and CPP have begun.

Jharkhand project
The proposed smelter capacity of the Jharkhand aluminium project is 359 ktpa and a CPP of 900 mw. The plant location is being shifted from Latehar to Sonahatu block which is 20 kilometers from Muri and 55 kilometers from Ranchi. The company is preparing to submit the application for the government land. The government of Jharkhand has given the water allocation clearance for 55 mcm of water from Subernrekha basin. Tubed coal mine has been allotted jointly with Tata Power. The technology contract for the smelter has already been executed with Aluminium Pechiney. The approximate date for the first metal from the smelter is expected by June 2012.

Utkal
The construction of Utkal alumina refinery with a proposed capacity of 1.5 mtpa is currently underway. The company has acquired the land for the plant and other facilities. The basic engineering packages have already been received from Alcan (technology supplier). Major packages have been ordered. The detailed engineering for the main plant area is nearing completion. The civil works for alumina refinery and captive power plant is in progress. Bauxite mining activities is expected to start by mid 2009. The mechanical completion of the plant is expected by January 2011 and the first alumina is expected to be produced around July 2011.

Hindalco Almex Aerospace Limited
This joint venture company for the manufacture of high-strength aluminium alloys for applications in the aerospace, sporting goods and surface transport industries is at an advanced stage of implementation. Key equipments have arrived at the site and are under installation. The project is proposed to be completed by end of August 2008.

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This press release is not for publication or distribution to persons in the United States, and is not an offer for sale within the United States of any equity shares or any other security of the Company. Securities of the Company, including its equity shares, may not be offered or sold in the United States absent registration under U.S. securities laws or unless exempt from registration under such laws.