Highlights of the concall
- For Q4 FY09, the consolidated revenue of the company dipped 36% Y-o-Y to Rs 4356.98 crore with OPM declining to 18.1% from 32.8% in Q4 FY08. The net attributable profit at the end stood at 598.25 crore, 55% lower on Y-o-Y.
Copper Business
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- The decrease in revenues from copper business was primarily on account of steep fall in LME prices of copper and fall in by-product realisation. The profitability in copper segment was also adversely impacted by steep fall in by-products realization and lower Tc/Rc.
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- The Gross Cost of Production for copper has reduced considerably from 16.94 c/lb in Q3 to 12.79 c/lb in Q4 FY09, mainly due to reduction in global commodity and crude prices.
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- After a good first half, the acid business saw a sharp decline in prices, mainly on account of cheaper fertilizer imports and low sulphur costs. The market showed signs of recovery at the end of the year.
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- Though fall in LME prices resulted in closure and cutbacks of several mines, global concentrate Tc/Rcs have been settled around 75/7.5 ($ 75 a tonne and 7.5 cents a pound) from this calendar year onwards. Spot market remains tight due to increased Chinese off take.
Aluminium Business
- The company has shut down a part of the BALCO Plant I smelter in Q4 2009 due to higher operational costs and sold surplus power in commercial market, to maximize returns.
- The decrease in revenue and profitability in aluminium division was primarily on account of reduction in LME. During Q4, LME prices of aluminium fell by about 50% to US$ 1360/tonne against US$ 2729/tonne in Q4 FY08.
- The cost control measures undertaken by the Company along with the drop in input prices started yielding positive impact on the unit cost of production (CoP) at BALCO, which reduced to US$ 1385 per tonne in Q4 FY09 compared with US$ 1642 per tonne in Q3 FY09. Unit CoP in March 2009 was US$ 1177 per tonne. Going forward, the management expects the trend of reduction in costs to continue.
- The first phase of the 500,000 tpa Jharsuguda I aluminium smelter is progressing well. Till date 257 pots have been brought in line, supported by 5 units of captive power plant. The remaining 76 pots in the first phase are ready for commissioning, awaiting power stabilisation. With this, the first 250,000 tpa phase is expected to be fully operational by Q1 FY10, six months ahead of the original schedule.
- The first stream of the alumina refinery at Lanjigarh is fully operational and produced 171,000 tonne in Q4 FY09, close to its rated capacity. The second stream of the alumina refinery has also recently commenced operations. The company expects to start progressive feeding of the Lanjigarh alumina refinery with its own Niyamgiri bauxite by mid FY10.
Zinc Business
- During Q4 FY09, HZL produced 175,438 tonne of mined metal and 150,544 tonne of saleable metal, an increase of 27% and 11% Y-o-Y respectively. The increase in mined metal production was primarily on account of the successful commissioning and ramp-up of the stream III concentrator at the Rampura Agucha mine while that in refined metal production was primarily on account of the additional production from the ramped-up 88,000 tonne de-bottlenecked capacity.
- During Q4, refined lead production was lower at 15,691 tonne compared with Q4 FY08, primarily on account of an unplanned shutdown of the Ausmelt smelter in January 2009.
- During Q4 FY09 and FY09 HZL achieved a record saleable silver production of 35,176 kilograms and 105,055 kilograms, an increase of 48% and 31% respectively Y-o-Y.
- During Q4 FY09, cost of production, before royalty, was lower at US$ 621/tonne compared with the US$ 698/tonne in Q3 FY09.