Q2 November 6, 2012 INVESTOR PRESENTATION
HIGHLIGHTS AND FINANCIAL PERFORMANCE 2
Q2, : Highlights ¾Operational performance sequentially better than Q1 ` Crore Sales EBITDA Q2 % Increase over Q1 6 164 6,164 2% 515 11% ¾Copper EBIT 2.8x vs. Q1 on the back of ramp-up of production after shutdown ¾Aluminium performance impacted by one-timers ¾Aditya Financial closure achieved; Common loan agreement for `9,896 crore signed in September 3
Financial Performance: Q2 ` Cr Change Vs Change Vs Q2 FY12 Q1 % Q2 FY12 % Q2 Q1 6 164 6,164 6028 2% 6 272 6,272 (1 7) (1.7) PBITDA 648 765 (15%) 845 (23.3) EBITDA 515 463 11% 660 (22%) PBT 447 513 (13%) 604 (26.0) PAT 359 425 (16%) 503 (28.4) EPS (`) 1 87 1.87 2 22 2.22 (16%) 2 62 2.62 (28 2) (28.2) Net Sales 4
Global economy: Clouds persist Global Manufacturing PMI World Aluminium consumption 60 55 Consumption growth (%) 2011 2012 (Est) 15.2 50 8.0 Below 50 for last 5 months 9.7 8.7 5.4 4.9 3.9 Oct-12 2 Jul-12 2 Apr-12 2 Jan-12 2 Oct-11 1 Jul-11 1 Apr-11 1 Jan-11 1 Oct-10 0 Jul-10 0 Apr-10 0 Jan-10 0 45 Central banks have announced large interventions; but have not been able to push the growth much US fiscal fi l cliff liff and d China Chi slowdown l d remain concerns for the near-term -4.7 China Europe N America World 5
LME still under pressure 2800 LME Al ($/t) Despite higher ingot premia, ~30% of the capacity making losses at current LME 2700 2600 2500 2400 2300 1,975 2200 2100 Th Though h western t world ld curtailed production (~2mn tons) this year, Chinese production growth has kept the market in surplus 2000 1900 1800 2012 is the 4th consecutive year when world stocks are >90 days of consumption (~95 days at present) Tough times for f Aluminium industry may continue for f a while, given the weak macro and overhang of stocks 6
Rising Premium providing some succor 300 US Midwest 250 Japan Europe (Duty paid) 200 150 100 50 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 Oct-09 Jul-09 Apr-09 Jan-09 Oct-08 Jul-08 Apr-08 Jan-08 0 But could not offset the negatives fully 7
Q2: External drivers remained adverse LME ($/t) 2,400 2,089 2,177 1,977 1,922 LME lower Firmness in regional premia Q2 FY12Q3 FY12Q4 FY12Q1 Q2 was a supporting factor (Q2 yoy) Input Costs (Q2, >30% >15% >10% C l Coal C Caustic ti Continued cost pressures F Furnace Oil 8
Q2: Operationally A Challenging Quarter One off issues impacted the operations Production loss at both Renukoot & Hirakud VAP also l got g t impacted i t d due d to t supply l chain disturbances Lower efficiency dragged financial performance in an extremely inflationary environment Copper pp business performance p though g got g back to normalcy post shutdown One off Internal challenges challenges to add to macroeconomic challenges.. 9
PERFORMANCE REVIEW: 10
Al : Subdued Production Quarterly 128 132 Half yearly H1 143 293 260 Q2 Q1FY 13 Q2 FY12 H1 Alumina (kt) H1 FY12 Alumina (kt) 328 335 332 663 667 Q2 FY 13 Q1 FY 13 Q2 FY12 H1 H1 FY12 11
Al: Financial Performance Net Sales (` Crore) 4,167 2,105 EBIT (` Crore) 4,306 1,028 2,063 270 440 170 Q2 Q1 H1 H1 FY12 Q2 Q1 H1 H1 FY12 Cost push, lower volumes, disruption-related efficiencies ffi i i & lower l LME 12
Cu: Output ramped up after shutdowns Cathode Output (kt) DAP Output (kt) 78 58 54 75 69 Q2 Q1 28 Q2 FY12 Q2 Q1 Q2 FY12 There were three annual shutdowns ((Cu-I,, Cu-III,, Fertilizer plant) in Q1 13
Cu: Financial Performance Net Sales (` Crore) 8,038 EBIT (` Crore) 284 8,002 293 209 4,066 3,972 76 Q2 Q1 H1 On H1 FY12 Q2 Q1 H1 H1 FY12 sequential basis EBIT up 2.8X 14
SEGMENT RESULTS Q2 15
PROJECTS UPDATE 16
Mahan Aluminium Smelter View Pot line ready TG-1 Ready for commissioning 9 Coal block Stage-I FC received 17
Utkal Alumina Refinery View Commissioning of DG Gearing up for commissioning g 18
Aditya Aluminium Pot Room O i CPP Overview Cathode Sealing Shop: Commissioned First draw-down of the loan in September Work in full steam 19
Hirakud FRP Cold Mill: Commissioned Finishing line Hot Mill Hot mill erection completed; commissioning to begin soon 20
Near-term Outlook Aluminium operations stabilizing; full return to normalcy expected in Q4 only With downside risks to LME, continued cost pressures and resource availability challenges, external environment remains rough Key projects into the last lap; Depreciation and interest will depress net income in the coming quarters Steady outlook for conversion businesses; will partly cushion us from the strain in Aluminium business 21
Th k you Thank
Forward Looking & Cautionary Statement Certain statements in this report may be forward looking statements within the meaning of applicable securities laws and statements regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company company ss operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the company s principal i i l markets, k t changes h i Government in G t regulations, l ti tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assume no responsibility to publicly amend, modify or revise any forward looking g statement, on the basis of any subsequent q development, information or events, or otherwise. 23