Hindalco Reports Commendable FY 2012 Results

OREANDA-NEWS. July 03, 2012. Consolidated net sales touches Rs. 80,000 crore – up 12 per cent

Consolidated net income at a record Rs. 3,397 crore – up 38 per cent

Consolidated Capex spending at over Rs. 12,500 crore

Financial highlights (audited)

Hindalco Industries Limited, the flagship company of the Aditya Birla Group, today announced its standalone and consolidated audited financial results for the year ended 31 March 2012. Consolidated net revenue for the year touched USD 17 billion and net income exceeded USD 700 million.
Consolidated results
Hindalco’s consolidated revenue at Rs.80,821 crore has been the highest ever, a growth of 12 per cent year-on-year, aided by better product mix and depreciating rupee. Profit before depreciation, interest and taxes stood at Rs.8,973 crore as against Rs.8,442 crore in FY11.

Net profit attributable to the shareholders increased to Rs.3,397 crore, up by 38 per cent over FY11. The increase in profit is primarily attributable to the strong performance at Novelis and copper business in India.
Despite economic headwinds, the balanced portfolio approach, low cost operation and strong value added businesses resulted in commendable performance. With low cost advantage and formidable global presence in aluminium downstream, Hindalco is well set for being the 'Last Man Standing' and the 'First Man Forward'.

Segment performance
Of the total annual revenues of Rs.80,821 crore, aluminium business contributed Rs.62,119 crore, up 11 per cent over the last year. Earnings before Interest and Taxes (EBIT) for aluminium business for FY12 remained flat at Rs.4,495 crore compared to Rs.4,469 crore in FY11. Strong growth in Novelis EBIT was offset by lower EBIT in Indian aluminium business.
Copper business revenue is higher at Rs.18,379 crore, a rise of 16 per cent from Rs.15,887 crore in FY11, mainly on account of higher copper LME and by-product credits. EBIT of Rs.1,119 crore vs. Rs.1,082 crore in FY11 was on the back of superior performance of custom smelting operations in India.
Standalone results
Standalone revenue for the year crossed the Rs.25,000-crore mark and stood at Rs.26,597 crore driven by higher volume and realisation.
Profit before interest and depreciation was Rs.3,721 crore, an increase of over 6 per cent compared to FY11, on account of higher volumes in aluminium business and better Treatment and Refining Charges (TcRc) in copper business, along with improved efficiencies and higher other income.
Novelis Inc (wholly owned subsidiary)
Novelis reported strong operating results in FY12 despite challenging market conditions globally. The premium product portfolio, long-term customer base and focused business model enabled Novelis to produce solid results for the year.
Net sales for FY12 were USD 11.1 billion, a 5 per cent increase compared to the USD 10.6 billion reported for the same period a year ago, mainly the result of favourable conversion premiums across all regions and an increase in average aluminium prices.
Novelis’s robust business model, good cost management and focus on premium products resulted in a record EBITDA per tonne of USD 371 for the year and the second straight year of USD 1 billion plus adjusted EBITDA. Shipments of aluminium rolled products totalled 2,838 Kt for FY12, compared to 2,969 Kt in FY11. Lower shipments were primarily the result of the overall economic slowdown and de-stocking by customers.

The continued optimisation of Novelis’ footprint will improve its competitive position; these include the divesture of three foil plants in Europe and closure of an aluminium sheet mill in Canada. During the year, Novelis invested in major recycling initiatives in all the four operating regions, including advanced equipment and technology to process diversified scrap inputs, which will enable Novelis achieve recycled content of 50 per cent by 2015.
During FY12, Novelis completed the acquisition of 31.3 per cent of the outstanding shares of its Korean subsidiary for USD 344 million, raising Novelis’ ownership to 99 per cent.
Aditya Birla Minerals Limited (51 per cent subsidiary)
Production of copper remained flat at 59.7 Kt in FY12. Net profit for the year at AUD 27 million was against AUD 57 million in FY11. The profitability of the subsidiary was impacted due to lower production at Nifty mines on account of the decline in mine grade (which was in line with the mining plan) and slower-than-expected ramp-up at Mt. Gordon mines.
Dividend
The board of directors of the company has recommended dividend of Rs.1.55 per share aggregating to Rs.344.89 crore (including dividend distribution tax of Rs.48.14 crore) for the year ended 31st March 2012.

Expansion projects in India

All of the above smelters (Mahan, Aditya, and Jharkhand) have dedicated coal blocks. Both Utkal and Aditya Alumina have captive bauxite mines. Financial closures have already been achieved for UAIL and Mahan Aluminium. Financial closure for debt portion of Aditya Aluminium is currently being pursued.

Mahan Coal: The Group of Ministers, constituted by the Government of India to consider environmental and developmental issues related to coal mining etc, has reported to have recommended granting of forest clearance by the Ministry of Environment and Forest (MoEF) for Mahan Coal block on certain conditions.

Novelis
Brazil: The previously announced expansion of Pinda facility in Brazil is expected to be commissioned by the end of 2012. Additionally, plans have been announced to install a new coating line for beverage can end stock and to expand recycling capacity in the Pindamonhangaba, Brazil facility.
Asia: The expansion of rolling and recycling capacity in Yeongju, South Korea and Ulsan, South Korea is on schedule and expected to become operational at the end of 2013.

Plans have been announced to invest USD 100 million, during the fourth quarter of FY12, in an aluminium automotive heat treatment plant in China. Construction of the new facility, which will have an annual capacity of approximately 120 Kt, is expected to begin in the fall of 2012. The plant is expected to be operational in late 2014.