Hindustan Copper has declared its fourth quarter results. Shakeel Ahmed, chairman and managing director of Hindustan Copper says, the company has been able to achieve this financial performance primarily on account of improved physical sales. “The total sales were 31,000 tonne for the full year, about 17% higher than the pervious year. This along with the superior rupee price of copper has contributed to our earning and profitability,” he adds.
He further says, the company would be raising about Rs 250 crore through ECB. “As on date, we have more than Rs 700 crore of surplus cash. In the next year, we will require investable fund through external sources. So, our expectation is that we should be raising about Rs 250 crore through ECB,” he elaborates.
Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.
Q: Could you take us through your numbers?
A: We have been able to achieve this financial performance primarily on account of improved physical sales, which were about more than 13,000 tonne of refined copper in the last quarter. The total sales were 31,000 tonne for the full year, about 17% higher than the pervious year. This along with the superior rupee price of copper has contributed to our earning and profitability.
Q: Over the past quarter we have seen the copper prices correct. However, we saw the rupee depreciating as well. So, what kind of net-net impact are we looking at margins on those basis?
A: Our EBITDA margins were 42%, one of the best in the recent years.
Q: Could you take us through whether the divestment department has given any indication whatsoever about a rough 10% divestment plan that they have outlined in this particular year?
A: Not yet. The Cabinet note is under circulation and inter-ministerial consultation and a final decision is yet to be taken on that.
Q: What about your investment plans for FY13? Could you give us the amount looking to raise? There was talk of ECBs being raised. What are the funding options and what are the expansion plans that you have laid out for this particular year?
A: As on date, we have more than Rs 700 crore of surplus cash. In the next year, we will require investable fund through external sources. So, our expectation is that we should be raising about Rs 250 crore through ECB.
Q: When will you all be looking at raising this particular Rs 250 crore? How will it be utilised?
A: We will decide the timing based on market conditions and our investment requirement. So, a call is yet to be taken.
Q: What are the production targets we have for this particular year? Is there any likelihood of any refining coming out of Hindustan Copper?
A: Our production target for the current financial year is quite challenging at 4 million tonne of ore and 35,000 tonne of refined copper, about 16% higher than the current year’s actual performance. It’s a challenging one. But we will try to achieve the challenging target in the year. We are hoping that by making use of our lean great ore at Malanjkhand and some incidental ore from projects, we should be able to come very close to the enhanced targets. That is our plan.
Q: Could you tell us at what particular copper prices, whether it’s Rs 8,500, Rs 8,400, what particular prices could you all go ahead and maintain the same EBITDA margins or if it drops below particular level, does it hamper your margins?
A: For the current calendar year, the expectation is that there will be a shortage of about 2 lakh 50 thousand tonne of copper. For 2013, a supply surplus has been predicted at 3 lakh 65 thousand. So, we are expecting that during the current year copper will be range bound between Rs 7,500 and Rs 8,500. With favourable Euro zone and Chinese economic conditions, it may inch towards Rs 9,000 target. At current rupee-dollar exchange rate, our revenue realisation is quite comfortable.
Also watch the accompanying presser.