Hindalco Industries Ltd.
NSE Symbol HINDALCO
HINDALCO has improved its performance well in q2 fy 11.
STAND ALONE RESULTS
Net Sales has improved to rs.5802.76 Cr – up by 12.77% from previous Qtr and by 18.6% from corresponding Qtr.
Net Profit is Rs.433.81 Cr DOWN BY 18.82% FROM PREVIOUS QTR BUT UP BY 26.09% from corresponding Qtr.
Basic EPS is Rs.2.27 (on FV of Rs.1) – against Rs.2.79 for previous qtr and Rs.2.02 for corresponding qtr. Thus, the domestic operations are progressing reasonably compared to corresponding qtr of last year.
Last annual conference Excerpts
“Building on a solid foundation, Novelis today is a leaner and more nimble entity. It is perhaps the only pure play focused, aluminium rolled products global company. It is on track to achieving its target of USD1 billion adjusted EBIDTA.
Aditya Birla Minerals Ltd., the Company's Australian subsidiary, had witnessed a turnaround as well, largely due to sustained cost management processes. It reported a PAT of AUD61.4 million vis-à-vis a loss of AUD76 million in the earlier year.
The smelter expansion at Hirakud from 155ktpa to 161ktpa was under progress and was slated for completion in the second quarter of financial year 2011. Further capacity expansion to 213ktpa, through the addition of 80 pots, is underway and expected to be completed by Q4 of 2012.
Additionally, the company is evaluating the possibility of amplifying the smelting capacity at Hirakud from the proposed 213ktpa to 360ktpa. An increase in the back-up captive power plant from the proposed 467.5MW to 967.5MW is on the anvil.
The process of marrying Novelis' high end technology with Hindalco's cost focus is progressing well. The high quality assets of the closed Rogerstone plant in UK are being moved to Hirakud in Orissa, India, close to the company's smelter. This, over time, will act as a hub for can body stock. In turn, it will help grow the highly promising beverage can market in India and neighbouring geographies to cater to the potential high growth of this product segment. The project will go on stream in Q2 FY12.
Utkal Alumina, a 100% subsidiary of Hindalco, was setting up a 1.5mtpa alumina refinery in Rayagada district of Orissa, India. The project would feed the alumina requirements of the Mahan and the Aditya smelters. These are currently under construction.
The company has successfully achieved the financial closure of Utkal Alumina with the signing of a common loan agreement of Rs.4,906 crore with a consortium of 28 banks. This constitutes the entire debt requirement of the project. The production of alumina should commence in Q2 of FY2012.
The equity requirement for Utkal Alumina project has been tied up as well. This is a significant milestone in the company's strategy to grow its alumina capacity and play the entire value chain in aluminium. The Utkal Alumina project offers the potential to scale up to 3mtpa at relatively low incremental capital cost.
All of the company's greenfield projects - Utkal Alumina, Mahan Aluminium, Aditya Alumina/Aluminium and Jharkhand Aluminium - are on course. Notwithstanding the difficult terrain, the company has made significant progress on each of these projects.
These projects are expected to be commissioned between 2012 to 2014. The company has earmarked a capex of around Rs.40,000 crore towards these projects.
The timely execution of greenfield projects will enhance cost competitiveness and give the company's customers a distinct global competitive edge.”
STAND ALONE RESULTS IN FIGURES :
| HINDALCO | 30-Sep-10 | 30-Jun-10 | DIF %1 | 30-Sep-09 | DIF %2 |
| Net Sales | 580276 | 514551 | 12.77 | 489256 | 18.6 |
| Other Operating Income | 5718 | 3274 | 74.65 | 2455 | 132.91 |
| SIT & WIP | -2693 | 19420 | -113.87 | -76941 | -96.5 |
| Raw Materials | 426402 | 333802 | 27.74 | 442750 | -3.69 |
| Traded Goods | 21006 | 9898 | 112.22 | 6221 | 237.66 |
| Employees Cost | 28427 | 22786 | 24.76 | 22818 | 24.58 |
| Depreciation | 17177 | 16909 | 1.58 | 16586 | 3.56 |
| Other Expenditure | 43017 | 48673 | -11.62 | 35947 | 19.67 |
| Total Expenditure | 533336 | 451488 | 18.13 | 447381 | 19.21 |
| Profit from Operations | 52658 | 66337 | -20.62 | 44330 | 18.79 |
| Other Income | 8210 | 6892 | 19.12 | 5729 | 43.31 |
| Interest | 5263 | 5933 | -11.29 | 6629 | -20.61 |
| P B T | 55605 | 67296 | -17.37 | 43430 | 28.03 |
| Tax expense | 12224 | 13856 | -11.78 | 9025 | 35.45 |
| Net Profit | 43381 | 53440 | -18.82 | 34405 | 26.09 |
| Face Value (In Rs | 1 | 1 | 0 | 1 | 0 |
| Paid Up Equity | 19137 | 19137 | 0 | 17005 | 12.54 |
| Basic EPS | 2.27 | 2.79 | -18.64 | 2.02 | 12.38 |
| Public Holding (%) | 59.45 | 59.46 | -0.02 | 0 | #DIV/0! |
ABOUT NOVELIS
Less then 18 months after taking over a troubled Novelis, Mr Martens is now helping it overtake rival Alcoa as the largest North American maker of metal for beverage cans. "In the US, we will be the dominant can-sheet provider... Alcoa took a different position within the US market and that has opened up opportunities," he told Bloomberg News in an interview this June.
The job, though, is not yet complete. Novelis had $2.4 billion in debt when it was acquired. Now it has $ 2.7 billion. About 90% of this will come up for repayment from 2014.
Mr Martens was a good choice for the role of Novelis chief for another reason. He is an auto industry veteran and knows Ford Motor inside out - the company and the auto industry are major Novelis customers. At present, 54% of the aluminium processed by Novelis goes into cans, only 7% into cars. But that equation is going to tilt towards cars. In the next five years, demand for aluminium from the world car industry is expected to grow by 10%, while demand for beverage cans will grow at less than half that pace. Aluminium's properties as a lighter, more malleable metal meets the auto industry's need for lighter, more fuel-efficient cars.
After an intense, hands-on phase at Novelis, it is now time for Mr Birla to do what he does at all other group companies — sit back and let the professional CEO take the wheel. It's a pity that he is vegetarian... otherwise he could have taken some time out to enjoy the steak at the Marriott in Atlanta.
| About Novelis |
| Novelis produces 19% of the world's flat-rolled aluminium products, including sheets from which beverage cans and car body parts, among others, are made |
| Customers include Coco-Cola, Ford, General Motors and ThyssenKrupp |
| It has a global footprint: 31 manufacturing plants in 11 countries, 11,600 employees |
| It is the world's largest recyler of used aluminium beverage cans:, 34% of its can stock production was made using recycled aluminium |
| Financials | | |
| Year | Revenues | EBIDTA |
| FY08 | 11.2 | 0.7 |
| FY09 | 10.2 | 0.5 |
| FY10 | 8.7 | 0.8 |
| FY11 | 10.0* | >1,0# |
| Figures in $ billion | ||
| *Annualised first-quarter revenues | ||
| #Company projection | ||
SUMMARY : The company’s domestic as well as foreign operations are well on their way to make HINDALCO one of the most profitable and well run Indian Multi-nationals.
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