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Hindalco Industries LimitedHindalco Industries Limited
Performance Review Performance Review
20062006--0707
Presentation for the InvestorPresentation for the Investor’’s Meets Meet
44thth May 2007May 2007
2
FY 2007 at a GlanceFY 2007 at a Glance
HIGHEST EVERHIGHEST EVER
Turnover : Rs. 18313 Crores (US$ 4455.1 mn)
EBIDTA : Rs.4385.1 Crores (US$ 1067 Mn)
PAT: Rs.2564.3 Crores (US$ 623.8 Mn)
Aluminium production at 442,685 T
Copper cathode Production at 290425 T
61%61%
54%54%
3%3%
55%55%
38%38%
Note: Exchange rate of 30th April’07 considered
3
Q4 FY 2007at a GlanceQ4 FY 2007at a Glance
HIGHEST EVER IN ANY QHIGHEST EVER IN ANY Q
Turnover : Rs.4,748.9 Crores (US$ 1,155 mn)
EBIDTA : Rs.1,173.2 Crores (US$ 285.4 Mn)
PAT : Rs.721.3 Crores (US$ 175.5 Mn)
Aluminium production at 114,334 T
Copper cathode Production at 81460 T
30%30%
17%17%
7%7%
15%15%
22%22%
Note: Exchange rate of 30th April’07 considered
4
52%25.5 --EPS
Change (%)Full YearChange
(%)Q4
2,564.3
3,504.6
4,385.1
18,313.0
15%
20%
17%
30%
721.3
957.9
1,173.2
4,748.9
55%
66%
54%
61%
Net Profit
Pre-tax profits
PBDIT
Net Sales & Operating Revenue
Financial Highlights Financial Highlights ––FY07FY07
Rs. CroresRs. Crores
BackdropBackdrop
Business Performance & OutlookBusiness Performance & Outlook
Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials
6
Backdrop : Global Macro Trends (FY06 to FY07)Backdrop : Global Macro Trends (FY06 to FY07)
2832
395
1,500
1,700
1,900
2,100
2,300
2,500
2,700
2,900
3,100
FY04 FY05 FY06 FY07190
240
290
340
390
440
490
540
590
640
690
Aluminium ($/t)
Alumina ($/t)
Aluminium prices at high levels & Alumina price again rising
60.74
7.22
30
40
50
60
70
80
FY04 FY05 FY06 FY072
4
6
8
10
12
14
16
Natural Gas ($/mmbtu)
WTI Crude ($/bbl)
Energy: Remaining Volatile
5388
0
1000
2000
3000
4000
5000
6000
7000
FY04 FY05 FY06 FY07
Baltic Dry Freight Index
Freight cost keeps moving up
Weakening Tc/Rc and Strong copper prices
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Apr
-04
Jul-0
4
Oct
-04
Jan-
05
Apr
-05
Jul-0
5
Oct
-05
Jan-
06
Apr
-06
Jul-0
6
Oct
-06
Jan-
07
0
10
20
30
40
50
60
Copper Price ($/t) Tc/Rc (c/lb)
7
Backdrop : Domestic Macro Trends (FY06, FY07 & FY08)Backdrop : Domestic Macro Trends (FY06, FY07 & FY08)
5.7%7.7%10.6%
0%
10%
20%
30%
40%
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08
Aluminium import duty
3.1%4.9%5.7%
0%10%20%30%40%
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08
Copper Duty Differential
Exchange rate- INR appreciating continuously
44.02
42.22
41.2141
42
43
44
45
46
47
April
'05
May'05
June
'05Ju
ly'05
Aug'0
5Se
pt'05
Oct'0
5No
v'05
Dec'0
5Ja
n'06
Feb'
06Mar
ch'06
April
'06
May'06
June
'06Ju
ly'06
Aug'0
6Se
pt'06
Oct'0
6No
v'06
Dec'0
6Ja
n'07
Feb'
07Mar
ch'07
April
'07
May'07
8
Significant Progress in the Strategic planSignificant Progress in the Strategic plan
Significant move into value added products accomplished through Novelis
acquisition.
Aluminium Growth plans
Hirakud Phase – I Expansion (upto 100 Kt) completed on schedule. Phase II (143 Kt) on
track.
Muri Expansion to be completed by Q3 FY08.
Hindalco has formed a JV with Almex, USA to manufacture high strength Aluminium
alloys for application in aerospace, sporting goods and surface transport industry.
All Greenfield Projects implementation plans moving as per schedule.
o Allotment of Tubed coal block (Latehar smelter project) reaches final stages.
o The State Governments have recommended both Aditya and Mahan Smelter projects for SEZ
status
Further cost effective de-bottlenecking of Aluminium production planned.
BackdropBackdrop
Business Performance & OutlookBusiness Performance & Outlook
Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials
AluminiumAluminium--Business PerformanceBusiness Performance
11
Aluminium EBIDTA MarginsAluminium EBIDTA Margins……..
1617
343939
50
Hin
dalc
o
Rio
Tint
o
Veda
nta
BHP
Alco
a
Alca
n
__________________________________________Source: Hindalco FY07, Vedanta & BHP YTD Dec’06 data, Alcan, Alcoa, Rio Tinto CY06 data.
Highest ever EBIDTA Margin Amongst the best in the industry
36%
50%
44%42%
0%
10%
20%
30%
40%
50%
60%
FY04 FY05 FY06 FY07
Note:EBIDTA includes Other income
EBIDTA Margin %
12
EBIT: At a new highEBIT: At a new high
810
1,109 1,042835
1,092
1,619
2,128
2,929
0
500
1000
1500
2000
2500
3000
3500
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
(Rs. Crs.)
Smelter Disruption
Indal Acquisition
_______________________Source: Company Data
13
AluminaAlumina
1198
.6
1203
.3
1159
.6
100%103%104%
0
200
400
600
800
1000
1200
1400
FY05 FY06 FY07
Prod
ucti
on (
Kt)
70.0%
76.0%
82.0%
88.0%
94.0%
100.0%
106.0%
Cap
acity
Util
isat
ion%
Alumina ProductionCapacity Utilisation%
Alumina: Capacity utilisation Special Alumina Sales as % of total Alumina Sales
49%
35%39%
0%
10%
20%
30%
40%
50%
60%
FY05 FY06 FY07
Standard Alumina realisation(Hindalco Vs Market):
596
481 481
550
281
218
347
0
100
200
300
400
500
600
700
Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY07
US$
/Mt
Hindalco realisation
Alumina market price
• Consistently sweating the assets to the maximum
level.
• Focus on Speciality Alumina to increase the
profitability and reduce volatility.
• Alumina Realisation higher than market due to
the judicious blend of long term contracts
entered by the company along with a portion of
spot sales.
14
Aluminium ProductionAluminium Production……. At an all time high. At an all time high
Highest Ever Production of Metal, Wire rod, Rolled and Extrusions
3232
8
2618
4
3828
2
2569
9
4291
40
1905
80
6773
0
4426
85
2110
88
6899
8
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
Metal Rolled Wire rods Extrusions Foils
FY 06 FY 07
Aluminium Production (KT)
15
Value added Products Value added Products …………registers continuous improvementregisters continuous improvement
583
613
2,546
2,638
Foil & wheelsExtrusions
Rolled Products
Primary Products
522
410
1,870
2,153
Foil & Wheels
Extrusions
Rolled Products
Primary Products
25.7
32.2
0
5
10
15
20
25
30
35
FY04 FY05 FY06 FY07
Rs/
Kg
Mark up
27.7
35.7
0
5
10
15
20
25
30
35
40
FY04 FY05 FY06 FY07
Rs/
Kg
Mark Up
Rolled- Domestic
Extrusions
Markup in the downstream business has improved consistently.
Sales Revenue- FY06 Rs.4955 Crores
Sales Revenue- FY07 Rs.6380 Crores
VAP Share 57%
VAP Share 59%
Note: Markup normalised for customs duty
Note: Markup normalised for customs duty
CopperCopper--Business PerformanceBusiness Performance
17
Cathode production up 80 KT (38%) YoY
LME Backwardation has come down from US$162/t in FY06 to 29 $/t in FY 07
(for 3M spread) , In Q4 LME moved from Backwardation to Contango of US$ 18/t
Copper cathode sales was up by 73KT (33%) in FY07
Achieved highest ever Copper sales of 29 kt in Feb’07
In FY 07 Domestic market share increased to 46 % from 43 % in FY 06.
Operating efficiency and Conversion cost improved.
Better realisation due to improved product mix.
FY 07 Key levers of PerformanceFY 07 Key levers of Performance
18
FY 07 FY 07 –– Copper Production PerformanceCopper Production Performance
15
45
61
88
0
10
20
30
40
50
60
70
80
90
H1 FY06 H2 FY06 H1 FY07 H2 FY07
Kt
Production trend of Cu III
99111
136
154
-10
10
30
50
70
90
110
130
150
170
H1 FY06 H2 FY06 H1 FY07 H2 FY07
Kt
Overall Copper Cathode Production
Copper Production grew by 38% during the year
19
Improving Market shareImproving Market share
Source: Hindalco
18% 43%39%
14%46%
40%
BC SIL HCL & SWIL
FY06 FY07
BC continues to be the Market leaderBC continues to be the Market leader
Aluminium Business OutlookAluminium Business Outlook
21
World Aluminium Market in Deficit during 2006World Aluminium Market in Deficit during 2006
Overall deficit of 486 Kt. The consumption growth at 8% was led essentially by China
____________________Source: CRU Quarterly April 2007
Aluminium Production Aluminium Consumption
33906
31970
29883
28017
8.7%
6.0%
7.0%6.7%
0
5000
10000
15000
20000
25000
30000
35000
40000
2003 2004 2005 20060%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%Production (Kt)
Growth %
343923184230314
27654
9.6%
8.0%8.3%
5.0%
0
5000
10000
15000
20000
25000
30000
35000
40000
2003 2004 2005 20060.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%Al. Consumption (Kt)
Growth %
22
Aluminium Stock position (Aluminium Stock position (LME+Comex+ShanghaiLME+Comex+Shanghai))
500000
700000
900000
1100000
1300000
1500000
1700000
1-Apr-0
316
-Jun
26-A
ug4-N
ov16
-Jan
26-M
ar10
-Jun
19-A
ug-0429
-Oct-
0412
-Jan-05
23-M
ar-05
7-Jun-05
16-A
ug-0526
-Oct-
059-J
an-06
20-M
ar-06
12/M
ay/06
24/Ju
l/06
3/Oct/
0611
/Dec
/0622
/Feb/07
800
1,300
1,800
2,300
2,800
3,300
3,800
Total Inventory (tonnes)
LME - CSPUS$/tonne
US$ 2792/Mt
962615 Mt
US$/MtInventory (Mt)
23
-6000
-4000
-2000
0
2000
4000
6000
Asia*
W. Euro
peN. A
merica
E. Eu
ropeChin
aMiddle Ea
stAfric
aLa
t. Americ
aAus
tralia CIS
World
kt
2005 2006 2007 2008 2009 2010
Though market is expected to be back to surplus during 2007; AsiThough market is expected to be back to surplus during 2007; Asia a (excl. china and middle east) continues to be major deficit area(excl. china and middle east) continues to be major deficit areass
KT
80
-486
576
458
226
315
-400
-300
-200
-100
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010
World Metal balanceWorld Metal balance Regional Metal balanceRegional Metal balance
____________________Source: CRU Quarterly April 2007
____________________Source: CRU Quarterly April 2007
* Asia excluding China and Middle East
24
There is tremendous long term growth potential in the countryThere is tremendous long term growth potential in the country…………
1.3
4.5
8.5
20.8
28.130.5
31.732.9 33.8
Indi
a
Braz
il
Chi
na
Fran
ce
Italy
Can
ada
USA
Japa
n
Ger
man
y
Per capita consumption (kg/capita)Per capita consumption (kg/capita)
China had 1.3 per capita consumption in1989-90 Source: Alcan Jan’07
If and when India achieves 50% of Chinese per capita consumption, the aluminum consumption in India will reach 4.2 Mn tonnes/annum (More
than 3 times the existing level)
25
HindalcoHindalco--Taking the lead in driving the marketTaking the lead in driving the market
The Consistent efforts of Our Market Development Cell is expected to result in
Aluminium consumption growth in the following markets during FY08.
Motor Cycles-Muffler/Handle bar/Connector
Windmills-Platforms/Nacelle Cover
Pallets- For Yarn Storage/Transport
Cycles – Aluminium Frames.
Railway Wagons
Roof-on-Roof Structures.
Three Aluminium Galleries already opened across the country. Many more are in the
pipeline.New Product
26
Alumina Alumina -- Market Outlook Market Outlook
Alumina Production expected to reach 74.54 Mn T in 2007 – 10% y-o-y growth.
The Alumina market is expected to be in surplus driven mainly by china –
approx. 5 million tonnes of alumina capacity expected to be added in China
alone during 2007.
Average spot Prices at present at ~ US$400/Mt level mainly due to Bauxite
supply disruptions at Guinea.
Re-processors in China becoming active with softening of MGA prices- will erode
prices in low value specials.
With increasing competition and lower MGA prices, softening of Specials prices
expected in 2007 & 2008.
27
Copper Business OutlookCopper Business Outlook
28
0
5000
10000
15000
20000
25000
2003 2004 2005 2006 2007 2008 2009-2%
0%
2%
4%
6%
8%
10%
MT CAGR
Copper Copper –– Demand & Market BalanceDemand & Market Balance…………....Kt Cu
Source: Brook Hunt
World Concentrate Market Balance
-300
-200
-100
0
100
200
300
400
500
600
700
2003 2004 2005 2006 2007 2008 2009
World Cu Demand Growth Rate
China Cu Demand Growth Rate
Demand growth in India and China projected to be strong
CAGR – 3.7 % 2007-09
0
1000
2000
3000
4000
5000
6000
2003 2004 2005 2006 2007 2008 20090%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
MT CAGR
Kt Cu
Kt Cu
0
100
200
300
400
500
600
700
2003 2004 2005 2006 2007 2008 20090%
2%
4%
6%
8%
10%
12%
14%
16%
18%
MT CAGR
India Cu Demand Growth RateKt Cu
CAGR – 9.5% 2007-09CAGR – 7% 2007-09
29
Significant growth prospects in the country Significant growth prospects in the country ……..
15.8
10.3
7.2
3.0
0.4
0
2
4
6
8
10
12
14
16
Germany Japan USA China India
Copper Per Capita Consumption Pattern
Kg/Person
Per capita consumption of Cu in India promises lot of potential in Indian market.
30
To Sum upTo Sum up
Strong metal prices in the current fiscal with some softening towards the end.
Continued cost push
Domestic market expansion to continue
Benefits to flow from
Focus on value added products
Enhanced capacity though its impact in FY08 will be marginal
Concentrate availability poor; Tc/Rc coming down sharply
Significant improvement in Copper production
Combination of factors like Cost Push, Reduced Customs duty & Strong rupee will make the current year a very challenging one. We are, however, confident
to overcome them by the steps already planned.
NovelisNovelis
32
Transportation15% Beverage
36%
Construction & Industrial
24%
Foil/Packaging
21%
Other4%
Novelis: Global Leader in Rolled AluminiumNovelis: Global Leader in Rolled Aluminium
2005 Global AluminiumRolled Products Production
Source: CRU, based on production data and Novelis estimates
Global leader in rolled aluminium: #1 rolled products supplier worldwide
Leader in: – Fusion technology
– Can, auto, foil markets
– Europe, Asia & S-A
– Rolling technology
– Continuous casting technology
– Recycling
2005 Global AluminiumRolled Products Production
Alcan6%
Novelis19%
Alcoa16%
Norsk Hydro6%
Aleris/Corus6%
Others47%
100% = 15,600ktTop 5 = 53%
33
NovelisNovelis: Global Aluminium Footprint: Global Aluminium Footprint
Employees: 3,000Revenues: $3.3bnShipments: 1,194kt 1
North America
Note:1 Shipments exclude inter-segment sales
Employees: 2,100Revenues: $0.6bnShipments: 288kt 1
South America
Employees: 1,600Revenues: $1.4bnShipments: 524kt 1
AsiaEurope
Employees: 5,500Revenues: $3.1bnShipments: 1,081kt 1
Employees: 12,5002005 Revenues: $8.4bn2005 Rolled Product Shipments: 2,873kt2005 Ingot Product Shipments: 214kt
Novelis Total
36 manufacturing facilities in 11 countries
Leading Market PositionLeading Market PositionLeading Market Position
Leading Market Position
Blue chip customer base: Coke, Pepsi, Rexam, Ford, Ball, Thyssen, Toyota, etc.
34
NovelisNovelis –– Global Market PositionGlobal Market Position
35
Financing StructureFinancing Structure
3550TOTAL
450Hindalco's Treasury
3100Recourse Financing by banks
on Corporate Guarantee of
Hindalco
HINDALCO NOVELISFigures in USD Millions
Novelis Enterprise Value ~ USD 6 billion
2400TOTAL
1400High Yield Bonds
1000Term Loans
Non Recourse Backstop committed
by banks on Novelis Balance Sheet
to refinance existing debt on
Change of Control
BackdropBackdrop
Business Performance & OutlookBusiness Performance & Outlook
Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials
37
Financial HighlightsFinancial Highlights
2852
4385
2106
3505
1655
2564
11397
18313
FY06 FY07
EBIDTA PBTPAT Sales
Rs. crores
FY 2007
1004
1173
797
958
626721
3657
4749
0
200
400
600
800
1000
1200
1400
Q4 FY06 Q4 FY07
EBIDTA PBT PAT Sales
Rs. crores
Q4 FY 2007
61%
EBIDTA > $1 Bn.
Highest ever sales and Profits in Q4 07 and FY 07
54%
66%
55%
30%
20%
15%
17%
Sustained Performance– Q on Q
475398
435
797 814 838896
958
379314 336
626 602 598644
721
FY06 Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY07 Q1 FY07 Q2 FY07 Q3 FY07 Q4
PBT PAT
Rs. crores
39
Drivers of Performance : FY07Drivers of Performance : FY07
UOM FY'06 FY07
LME - Aluminium $/T 2029 2664
Rs/USD 1$ = Rs. 44.17 45.25
Custom Duty on Al. % 10.6% 7.7%
Domestic Metal Prices Rs./T 98,256 125,436Standard Alumina $/T 401 498 % of LME % 19.8% 18.7%
Copper LME $/T 4105 6862
TcRc C/Lb 22.03 34.01
Duty Differential in Copper % 5.7% 4.9%
40
Detailed Financial ResultsDetailed Financial Results
(In Rs. Crores) % Q4 Q4 % FY07 FY06 Chg FY07 FY06 Chg
Net Sales 18,313.0 11,396.5 61% 4,748.9 3,657.4 30%Other Income 370.1 243.9 52% 123.3 74.3 66%PBDIT 4,385.1 2,852.0 54% 1,173.2 1,004.1 17%Interest & Finance Charges 242.4 225.2 -8% 57.7 62.4 7%Depreciation & Impairment 638.1 521.1 -22% 157.6 144.3 -9%Profit Before Tax 3,504.6 2,105.7 66% 957.9 797.4 20%Provision for Taxes 940.3 450.2 -109% 236.6 171.1 -38%PAT 2,564.3 1,655.5 55% 721.3 626.3 15%E.P.S. (Rs.) 25.5 16.8 52% 7.2 6.4 13%C.E.P.S. (Rs.) 31.9 22.1 44% 8.7 7.8 12%
41
Segment ResultsSegment Results
40%
85%
60%
60%
15%
40%
Sales
EBIT
C.E
Aluminium Copper
Business Mix – FY07
FY07 FY06 % Chg FY07 FY06 % Chg
Net Sales & Op. Revenues 7,344 6,042 22% 10,978 5,354 105%
EBIT 2,929 2128.1 38% 517.1 19.3
EBIT Margin 39.9% 35.2% 4.7% 0.4%
Capital Employed 7,451 6,579 13% 4,931 5,074 -3%
ROCE (%) 41.8% 35.2% 10.3% 0.4%
Particulars Rs Crs.
Aluminium Copper
ALUMINIUMALUMINIUM
43
Aluminium Business: FY07 HighlightsAluminium Business: FY07 Highlights
First line of 214 pots- Prebake Smelter
commissioned at Hirakud
Metal Production increased by 3.2% to
442,685 MT
VAP (Rolled and Extrusion) Production
increased to 249,370 MT, an increase of
12.5% Over FY 06.
Domestic and Export Realisations
increased due to higher LME, Higher
Alumina prices and Rupee Depreciation
1,6831,437Exports
Highest ever Sales, Profits and Exports
2684
3694
2128
2929
6042
7344
FY06 FY07EBIDTA EBIT Sales
Rs. crores 22%
38%
38%
44
Aluminium: Production Performance Aluminium: Production Performance –– FY07FY07
Present Capacities fully stretched.
Brownfield Expansions will Kick in from FY 08.
Unit FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgAlumina MT 1,198,658 1,203,383 -0.4% 296,411 299,006 -0.9%Metal MT 442,685 429,140 3.2% 114,334 106,825 7.0%Wire Rods MT 68,998 67,730 1.9% 16,948 16,738 1.3%Rolled Products MT 211,088 190,580 10.8% 48,322 45,536 6.1%Extrusions MT 38,282 32,328 18.4% 9,525 9,044 5.3%Foil MT 25,699 26,184 -1.9% 6,144 6,315 -2.7%Alloy Wheels Nos. 196,621 194,079 1.3% 45,193 58,569 -22.8%Power MU 8,315 7,845 6.0% 2,074 1,963 5.7%
45
Aluminium: Sales RevenuesAluminium: Sales Revenues
Sales Revenue FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgAlumina Rs.Crs. 732 801 -9% 197 241 -18%Primary Metal Rs.Crs. 1,701 1,448 17% 533 397 34%Wire Rod Rs.Crs. 915 705 30% 233 201 16%Rolled Products Rs.Crs. 2,541 1,860 37% 691 529 31%Extrusions Rs.Crs. 609 410 49% 170 121 40%Foils Rs.Crs. 543 485 12% 132 123 8%Wheels Rs.Crs. 40 37 8% 10 11 -6%Others Rs.Crs. 263 296 -11% 76 103 -26%Net Sales Rs.Crs. 7,344 6,042 22% 2,042 1,726 18%Of which Exports Rs.Crs. 1,683 1,437 17% 523 387 35%
46
1,860
2,541
410
609
485
543
FY06 FY07
DeDe--risk Product Portfolio risk Product Portfolio –– Focus on Value Added Focus on Value Added ProductsProducts
151,568169,866
38,11026,003
25,366
32,181
FY06 FY07
FoilsExtrudedRolled
VAP Revenues (Rs. Crores)VAP Sales Volumes (MT)
209752209752
233342233342
27552755
36933693
Recently acquired Mouda Sheet Plant and and Sangam Extrusion Press Harnessed
47
Aluminium Business Profitability Aluminium Business Profitability –– FY07FY07
Rs. Crs Sales increased by 21.5%
EBIT increased by 37.6% YoY.
Margins improved to 40% from 35%, backed by:-
Improved realisations and higher volumes
Improved operating efficiencies
Despite
Higher cost of Bauxite, Coal, caustic soda , furnace oil and Pitch
3,914
2,128
6,042
4,415
2,929
7,344
FY06 FY07
Segment Expenses Segment EBIT
COPPERCOPPER
49
Copper Business: FY07 HighlightsCopper Business: FY07 Highlights
Copper Cathode Production Increased by 38% to 290,425 MT
Sales of value added CC Rods grew 24% to 109,510 MT
Gold production increased to 10.334 MT, an increase of 54 %
Sulphuric Acid Production increased by 40% to 892,597 MT against 639,414 MT in FY 06,
Improved realisations due to higher LME, Higher TcRc and Rupee Depreciation
Sharp Turnaround
192
774
19
517
5354
10978
FY06 FY07EBIDTA EBIT Sales
Rs. crores 105%
304%
50
Copper : FY07 ProductionCopper : FY07 Production
Copper 3 Smelter Ramp up on higher trajectory
Production Unit FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgCopper Cathodes MT 290,425 210,227 38.15% 81,460 66,748 22.04%CC Rods MT 109,033 88,687 22.94% 30,076 23,725 26.77%DAP/NPK MT 219,333 218,199 0.52% 53,794 55,850 -3.68%Sulphuric Acid MT 892,597 639,414 39.60% 240,860 223,146 7.94%Gold Kg 10,334 6,711 53.98% 2,961 1,951 51.77%Silver Kg 48,462 35,079 38.15% 17,827 9,879 80.46%
51
Rs. Crs.Rs. Crs.
Copper: FY07 Sales RevenuesCopper: FY07 Sales Revenues
Product FY 07 FY 06 % Chg Q4 FY 07 Q4 FY 06 % ChgCopper Cathodes 5667 2462 130.2% 1320 984 34.2%CC Rods 3572 1919 86.1% 791 589 34.3%DAP/NPK 348 319 9.2% 84 96 -12.0%Sulphuric Acid 48 47 2.7% 12 18 -33.3%Gold 944 452 109.0% 274 147 86.2%Silver 89 40 122.1% 35 12 187.3%Others 309 115 167.6% 194 86 126.6%Total Sales 10978 5354 105.0% 2711 1932 40.3%of which Exports (FOB) 5322 2249 136.7% 1207 908 33.0%
52
5,335
19
5,35410,46
1
517
10,978
0
2,000
4,000
6,000
8,000
10,000
12,000
FY06 FY07
Segment Expenses Segment EBIT
Sales more than Doubled
Segment EBIT Higher than FY 06 due to
Higher Sales Volumes
Improved Efficiencies
Higher LME
Better TcRc
Despite
Target Plus Impact
Smelter II Impairment
Input Cost Escalations
Rs. Crs.Rs. Crs.
Copper Business Profitability Copper Business Profitability -- FY07FY07
53
Other Income Other Income -- FY07FY07Other Income increased due to:-
Higher Interest income on Income Tax refund
Rs. Crs
INR Average Yields
244
370
FY06 FY07 Other Income
The hardening at the short end of the yield curve has reflected The hardening at the short end of the yield curve has reflected in Treasury yields in Treasury yields
4.50%
5.50%
6.50%
7.50%
8.50%
FY-06 5.66% 5.97% 6.73% 7.12%
FY-07 7.22% 6.96% 7.52% 7.78%
Overnight 1 year 5 Year 10 Year
Interim Dividend received. From Group Companies
54
Interest & Finance Charges Interest & Finance Charges –– FY07FY07
Net Interest and finance charges higher than last year due to
Increase in working capital
requirement at Copper driven by
higher LME
Lower interest capitalization due
to completion of Copper III
Increase in average borrowing
cost
225 242
30
176255
418
FY06 FY07
Net Int. CapitalisedNet InterestGross Interest
Rs. Crs
55
Taxes Taxes –– FY07FY07
Provision for Current Taxes higher mainly due to
Higher pre-tax profits which rose 66% YoY and
Lower proportion of income exempt from tax.
Deferred Assets have been created for Impairment of Assets. 334
116
995
-55
FY06 FY07
Current Tax Deferred Tax
Rs. Crores
940
450
Effective Tax Rate : 26.8% vs. 21.4% (last year)
649
Thank YouThank You
Sustained Performance– Q on Q
475398 435
797 814 838896
958
FY06 Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY07 Q1 FY07 Q2 FY07 Q3 FY07 Q4
PBT
Rs. crores
58
Aluminium: Sales VolumesAluminium: Sales Volumes
Sales Tonnage Unit YTD YTD % Chg Q4 Q4 % Chg FY07 FY06 FY07 FY06
Alumina MT 299,762 388,646 -23% 86,427 106,295 -19%Primary Metal MT 134,756 146,785 -8% 40,884 35,755 14%Wire Rod MT 69,067 67,895 2% 17,439 16,834 4%Rolled Products MT 169,866 151,568 12% 45,708 39,830 15%Extrusions MT 38,110 32,181 18% 10,344 8,810 17%Foils MT 25,366 26,003 -2% 5,950 6,255 -5%Wheels Nos 188,772 199,403 -5% 46,118 61,494 -25%
59
Copper : FY07 Sales VolumesCopper : FY07 Sales Volumes
Sales Volumes Units FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgCopper Cathodes & others MT 181,944 130,436 39.49% 51,275 44,182 16.05%CC Rods MT 109,510 88,331 23.98% 31,039 23,851 30.14%DAP/NPK MT 220,935 216,902 1.86% 54,389 51,850 4.90%Sulphuric Acid MT 559,033 294,755 89.66% 153,789 129,547 18.71%Gold KG 10,484 6,736 55.65% 3,041 1,921 58.31%Silver KG 48,716 35,973 35.42% 19,227 9,560 101.11%
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