Hindalco Industries (HINDALCO) Q4 98/99 earnings summary

Executive summary

• FY1998-99 delivered record results, with sales growth, stronger operating margins and higher net profit despite weak aluminium prices and a domestic industrial slowdown.

• Higher production, improved capacity utilisation and a richer value-added product mix supported performance; metal smelter utilisation exceeded 99%.

Financial highlights

• Sales were Rs. 17,669.94 million, up 20% YoY; operating profit rose 28.4% to Rs. 7,775.24 million.

• Profit before tax was Rs. 7,137.87 million; profit after tax increased 14.2% to Rs. 5,667.87 million.

• EPS rose to Rs. 76.11 from Rs. 66.64; proposed dividend increased to Rs. 6.50 per share from Rs. 5.25.

• Average realised prices improved 3% YoY while LME aluminium prices fell 18%; exports were Rs. 1,654.57 million versus Rs. 1,701.89 million.

Outlook and guidance

• Sales outlook was encouraging, supported by expected recovery in international demand and prices and higher Indian industrial growth.

• Foils, higher-value rolled products, alloy wheels and value-added primary aluminium were expected to support future sales and realisations.

• Alloy wheel plant commissioning was expected in Q1 FY1999-2000; feasibility reviews continued for greenfield Aditya Aluminium and brownfield Renukoot expansion, subject to shareholder-value tests.

• Management expected alumina output to approach installed capacity of 450,000 tonnes as efficiency and utilisation improved.