Sterlite Industries (India) Limited (“SIIL” or the “Company”)
today announced its unaudited consolidated results for the third
quarter (“Q3”) and nine months (“nine month period”) ended
31 December 2011.
Highlights of the
quarter
Operational Performance
- Record production volumes of refined
Lead and Silver at Zinc India operations
- Commissioned the 350tpa silver refinery
at Zinc India
Financial performance
- Revenues up 24% at Rs. 10,246
crore
- EBITDA up 17% at Rs. 2,318 crore
- PAT at Rs. 914 Cr after foreign
exchange loss of Rs. 425 crore
- Strong balance sheet with cash and
liquid investments of Rs. 21,546 crore
Financial
Highlights
(In Rs. crore, except as stated)
Particulars
Quarter ended 31
December
Change
Nine Months Ended31
December
Change 2011 2010
% 2011 2010 % Net Sales/Income
from operations
10,246 8,294 23.5
30,204 20,248 49.2 EBITDA
2,318 1,979 17.2
7,559
4,991 51.4 Interest expense (excluding forex)
157 74
459 217
Exchange gain/(loss)
(425) (18)
(798) 22 Profit
before depreciation and taxes (PBDT)
2,606
2,382 9.4
8,721 6,516 33.8
Depreciation
458 249
1,323 678 Taxes
505
421
1,624 1,245
Profit After Taxes
1,643 1,711
(4.0)
5,775 4,592 25.8 Minority
Interest
466 508
1,611 1,269 Share in Profit/(Loss) of
Associate
(264) (102)
(612) (205) Attributable PAT after
exceptional item
914 1,101 (17)
3,551 3,118 13.9 Basic Earnings per Share
(EPS) (Rs. /share)*
2.7 3.3
10.6 9.3 Underlying earnings per
Share (EPS) (Rs./share)* (Before FX loss)
4.0
3.3
12.9 9.2
Exchange rate (Rs/$)
51.0 45.3 12.7
47.2 45.7 3.2
*Not Annualized
Zinc India Business
Particulars
Quarter ended 31
December
Change
Nine Months Ended31
December
Change
2011 2010
%
2011 2010 %
Production (in Kt, except
for silver)
Mined Metal
209 222 (6.0)
607
609 (0.3) Refined Metal – Zinc
191 178
7.1
569 519 9.6 Refined Metal –
Lead(1)
29 14 102.0
62
46 35.5 Silver (in 000’s Kgs) (2)
58
42 37.1
154 129 18.9
Financials
Revenue (Rs. Cr)
2,726 2,589 5.3
8,070 6,663 21.1 EBITDA (Rs. Cr)
1,373 1,497 (8.3)
4,351
3,600 20.9 PAT (Rs. Cr)
1,278 1,303
(1.9)
4,087 3,129 30.6 CoP with
Royalty ($/MT)
944 988 4.5
1,015 994 (2.1) CoP without Royalty ($/MT)
785 790 0.7
836
817 (2.3) Zinc LME ($/MT)
1,897 2,315
(18.0)
2,123 2,116 0.3 Lead LME
($/MT)
1,983 2,390 (17.0)
2,328 2,124 9.6
(1) Includes captive consumption of 1,730 tonnes in Q3 FY2012
vs. 1,746 tonnes in Q3 FY2011, and 4,469 tonnes in ‘nine months
period’ FY2012 vs. 4,558 tonnes in ‘nine months period’ FY2011.
(2) Includes captive consumption of 9,182 Kgs. in Q3 FY2012 vs.
9,236 Kgs. in Q3 FY2011, and 23,571 Kgs. in ‘nine months period’
FY2012 vs. 23,981 Kgs. in ‘nine months period’ FY2011.
Mined metal production in Q3 was marginally lower at 209,007
tonnes, compared with the corresponding prior quarter. Refined Zinc
production in Q3 was up 7% at 190,946 tonnes, compared with the
corresponding prior quarter primarily on account of improved
throughput and operational efficiencies.
Refined Lead production in Q3 was highest ever at 28,804 tonnes,
up 102%, compared with the corresponding prior quarter. The
increase in production was due to volume contribution from the
newly commissioned 100kt Dariba Lead smelter, currently under
ramp-up.
Refined Silver production in Q3 was highest ever at 57,595 kg,
up 37% compared with the corresponding prior quarter. This was
mainly attributable to higher input from the mines and volume
contribution from the new 350tpa Silver refinery commissioned
during the quarter.
Revenues and EBITDA for Q3 were Rs. 2,726 crore and Rs. 1,373
crore respectively. The decrease in EBITDA was mainly on account of
lower LME prices, higher coal costs and manufacturing expenses,
which more than offset the benefit of higher volumes and higher
realisation on account of rupee depreciation.
The Zinc metal cost, without royalty, during the quarter was Rs.
40,300 per MT ($785), 13% higher in INR, compared with the
corresponding prior quarter. The positive impact of operational
efficiencies was more than offset by increase in commodity prices
and other inflationary factors.
The average Silver Cash Settlement Price per London Bullion
Market Association increased to $31.87/oz in Q3 FY2012 from
$26.43/oz in the corresponding prior quarter. The silver revenue
increased to Rs. 255 Cr from Rs. 116 Cr in corresponding prior
period.
Expansion Projects
Ramp-up of the Sindesar Khurd mine is on track to achieve its
targeted 2.0mtpa capacity. The 100ktpa Dariba Lead smelter,
commissioned during Q2, is ramping up well. The new 350tpa Silver
refinery has been successfully commissioned during the quarter. The
mine development work at proposed 1.0mt Kayar mine has
commenced.
Zinc International
Business
Particulars
Quarter Ended31st
December
Quarter Ended30th
September
Change
Nine Months Ended31
December
2011
2011 %
2011 Production (Kt)
Mined Metal
Content (MIC)- BMM & Lisheen
71 77
228 Refined Metal content – Skorpion
34 37
109 Total
105 114 (7.9)
337
Financials
Revenue
(Rs. Cr)
1,030 1,160 (11.2)
3,251 EBITDA (Rs. Cr)
342 526
(35.0)
1,385 PAT (Rs. Cr)
201
342 (41.2)
860 CoP – ($ per MT)
1,188 1,242 4.3
1,237 Zinc LME
($/MT)
1,897 2,224 (14.7)
2,123 Lead LME ($/MT)
1,983 2,459
(19.4)
2,328
The total equivalent zinc-lead production was 105,000 tonnes in
Q3. This comprised production of zinc-lead concentrate of 71,000
tonnes MIC at BMM and Lisheen, and refined zinc production of
34,000 tonnes at Skorpion.
Revenues and EBITDA for Q3 were Rs. 1,030 crore and Rs. 342
crore respectively, a decrease of 11.2% and 35% respectively,
compared with the immediately preceding quarter. EBITDA is lower on
account of lower zinc and lead LME, partly offset by decrease in
the production costs.
Copper Business
Particulars
Quarter Ended 31st
December
Change
Nine Months Ended31
December
Change
2011 2010
%
2011 2010 %
Production (Kt)
Mined Metal Content
6 4
50.7
17 18 (2.4) Cathodes
84 79 6.9
245 224
9.7
Financials
Revenue (Rs. Cr)
5,130 4,626 10.9
15,068 10,740 40.3 EBITDA (Rs. Cr)
395 225 75.5
1,125
693 62.3 Exchange gain/(loss)
(179) (6)
(376) 14 PAT (Rs.
Cr)
347 265 30.9
1,033
1,182 (12.6) Net CoP – cathode (¢/ lb)
2.4 1.2
(1.4) 5.0
Tc/Rc (¢ / lb)
15.9 11.2
42.6
14.3 12.1 17.8 LME ($/MT)
7,489 8,674 (13.7)
8,531
7,638 11.7
During Q3, copper cathode production at the Tuticorin smelter
was 6.9% higher at 84,000 tonnes compared with the corresponding
prior quarter.
Mined metal production at Australia mines was 6,000 tonnes in
Q3.
Revenue and EBITDA for Q3 were Rs 5,130 crore and Rs 395 crore,
an increase of 10.9% and 75.5% respectively, compared with the
corresponding prior quarter, primarily on account of higher TcRcs,
better margins on phosphoric acid sales, and positive impact of
rupee depreciation.
Despite improved operational performance, the PAT was lower due
to MTM loss on FCCB bond liabilities due to depreciation of Indian
Rupee which resulted in a net exchange loss of Rs. 72 crore in Q3
after adjusting fair value gain on derivative portion.
In reference to Special Leave Petition (SLP) filed by the
company against the closure order of the copper smelter at
Tuticorin, the Honourable Supreme Court in subsequent hearings
directed Tamil Nadu Pollution Control Board (TNPCB) to issue
directions to implement the improvement measures suggested by
National Environment Engineering Research Institute (NEERI),
Central Pollution Control Board (CPCB) and TNPCB. The matter was
last heard on 17th January 2012 and listed for further hearing on
March 18 2012. The company is fully on track to implement the
improvement measures suggested by TNPCB. Interim stay order granted
by the Supreme Court continues and the unit continues to operate at
rated capacity.
Expansion Projects
The construction of the captive power plant at Tuticorin is
progressing well and the first unit of 80MW is scheduled for
commissioning in Q4 FY2011-12.
Aluminium Business
(BALCO)
Particulars
Quarter Ended 31st
December
Change
Nine Months Ended31
December
Change 2011 2010
% 2011 2010 %
Production (Kt)
Aluminum
63 65
(4.3)
184 193 (5.0)
Financials
Revenue (Rs. Cr)
801 802 (0.2)
2,243
2,186 2.6 EBITDA (Rs. Cr)
32 158
(79.7)
278 386 (27.9) PAT (Rs.
Cr)
(17) 103
110
197 (43.9) CoP ($/MT)
1,880
1,795 (4.8)
1,984 1,785 (11.1)
LME ($/MT)
2,090 2,343 (10.8)
2,360 2,176 8.5
The BALCO aluminium smelter continues to operate at its rated
capacity, with production of 63,000 tonnes during Q3.
Revenue and EBITDA for Q3 were Rs. 801 and Rs. 32 Crore
respectively. EBITDA was lower on account of higher costs of
production and lower LME prices, partly offset by the rupee
depreciation. During Q3, the COP of hot metal produced was at Rs
98,234 per MT, 22% higher in INR, compared with the corresponding
prior quarter. The increase in cost was primarily due to increase
in costs of coal, alumina and carbon.
Expansion Project
The first metal tapping from the 325 ktpa aluminium smelter is
now scheduled for Q2 FY2013. The first unit of the 1,200MW
(4x300MW) captive power plant is expected to be synchronised in Q1
FY 2012-13.
Coal Block
We have made further progress on getting the required regulatory
approvals for the 211 mn tonne coal block at BALCO. The EAC in its
meeting held in Nov 2011 has accorded its approval for the project,
paving the way for the remaining approvals.
Vedanta Aluminium
Limited
Particulars
Quarter Ended31 December
Change
Nine Months Ended31
December
Change 2011 2010
% 2011 2010 %
Alumina
(Mt) 236 147 60.7
687
522 31.6
Aluminium (Mt) 107
103 4.4
308 277 11.3
Financials
Revenue (Rs. Cr)
1,444 1,216 18.7
4,117
3,086 33.4
EBITDA (Rs. Cr)
102
131 (22.1)
341 468 (27.1)
Exchange gain/(loss) (339) 48
(544) 238
PAT
(Rs./ Cr)
(893) (347)
(2,076) (697)
SIIL Share
(Rs./Cr)
(264) (102)
(612) (205)
Alumina COP ($/MT)
323 343 5.9
350
328 (6.7)
Aluminium COP ($/MT) 2,004
2,071 3.3
2,280 1,974
(15.5)
Alumina production at Lanjigarh was 236,000 tonnes in Q3. The
Aluminium production in Q3 was 107,000 tonnes at Jharsuguda – I
smelter.
Revenue and EBITDA for Q3 were Rs. 1,444 crore and Rs 102 crore
respectively. The COP of hot metal produced during the quarter was
Rs 102,224 per MT (US $2,004), 9% higher than the corresponding
prior quarter due to higher coal and carbon costs. However, the CoP
of hot metal during Q3 was lower by 22% compared to Q2 due to
improved operational performance as expected.
During the quarter, there was a net loss of Rs. 893 Crore on
account of compressed margins and higher finance cost due to Mark
to Market loss on foreign exchange fluctuation on borrowings. The
interest and finance charges during Q3 were Rs. 793 crore which
includes MTM loss of Rs 339 crore due to currency depreciation.
The 1.25 mtpa Jharsuguda-II smelter project is in the final
stages of completion, and we continue to evaluate the option of
selling power versus producing aluminium at this smelter.
Status of Investment in Associate Company as at 31 Dec
2011
Investment In VAL (Rs. In Crore)
Sterlite
Vedanta External Total
Equity 563 1,391 NA 1,954
Quasi Equity / Debt 9,612 2,299 15,653
27,564
Total funding 10,175
3,690 15,653 29,518
Corporate Guarantees
4,358 26,477 - 30,835
Energy Business
Particulars
Quarter Ended31st
December
Change
Nine Months Ended31
December
Change 2011 2010
% 2011 2010 %
Merchant sales
(Mn units)
SEL * 1,559
245
3,964 294
Balco 270 MW 382 418
(8.9)
1,192 1,192 (0.3)
WPP
56 36 54.9
256 156
63.3
Total 1,996 699
5,412 1,642
Financials
Revenue (Rs. Cr)
574 123 365.3
1,775 505
251.4 EBITDA (Rs. Cr)
147 37
297.4
447 250 78.7 PAT (Rs. Cr)
35 18 98.3
108 153
(29.2) Average CoP (Rs./ unit)
2.47 1.82
(35.7)
2.50 1.76 (42.1) Net
Realization (Rs./unit)
3.4 2.7 26.6
3.60 3.75 (4.0) SEL CoP (Rs/unit)
2.6 - -
2.78 -
SEL realization (Rd/unit)
3.5 -
-
3.7 -
* 428 MU and 717 MU generated under trial run in Q3 and nine
months ended Dec 2011 respectively.
Power sales were 1,559 million units during Q3, significantly
higher compared with the 245 million units in the corresponding
prior quarter. The increase in power sales was mainly on account of
sales from two 600 MW units at the 2,400 MW Jharsuguda power
plant.
Revenue and EBITDA for Q3 were Rs.574 Crore and Rs.147 Crore
respectively, an increase of 365% and 297% compared with the
corresponding prior quarter. Increase in revenue was on account of
higher sales from two units of 600 MW each commissioned in March
and May 2011 and higher realisations of power.
During Q3, the generation cost at SEL was Rs 2.6 per unit as
against the Rs 2.9 per unit in Q2 of 2011-12. The cost at SEL was
lower on account of improved operating performance.
The third 600 MW unit is currently under trial run.
Expansion Projects
Work on the fourth 600 MW unit of the Jharsuguda power plant is
progressing well and the same is expected to be synchronized in Q4
FY 2011-12.
Work on the power project at Talwandi Sabo is progressing as
scheduled with synchronization of first unit scheduled for Q4 FY
2012-13.
We have commissioned 135MW of the 150MW expansion in wind power
generation capacity announced in January 2011. The balance capacity
is expected to be commissioned in early Q4 FY2012. Post the
expansion, the Company’s wind power generation capacity will
increase to 273MW.
Depreciation
Depreciation and amortization cost for the quarter was higher at
Rs. 458 crore compared with Rs. 249 crore during the corresponding
prior quarter, due to capitalisation of Dariba lead smelter at Zinc
India operations, wind power project and two units of 600 MW at
SEL, Jharsuguda and Rs 142 crore charged during the quarter on the
assets of our Zinc International business.
Income Tax
Effective tax rate was at 23.5% for the current quarter compared
with 19.7% in the corresponding prior period.
Foreign Currency Losses
Due to depreciation of Indian Rupee, the net impact of foreign
currency exchange fluctuations during the quarter resulted in a
loss of Rs 425.39 crore.
Cash, Cash Equivalents and liquid
investments
As at 31 December 2011, on consolidated basis, the Company had
cash and cash equivalents of Rs. 21,546 crore, out of which Rs.
13,683 crore was primarily invested in debt mutual funds and Rs.
7,863 crore was in Bank fixed deposits and current account balance
with Banks.
About Sterlite
Industries
Sterlite Industries (India) Limited is India’s largest
diversified metals and mining company. The company produces
aluminium, copper, zinc, lead, silver, and commercial energy and
has operations in India, Australia, Namibia, South Africa and
Ireland. The company has a strong organic growth pipeline of
projects. The company is setting up 5,040 MW independent thermal
power plants through its subsidiary Sterlite Energy Limited.
Sterlite Industries is listed on the Bombay Stock Exchange and
National Stock Exchange in India and the New York Stock Exchange in
the United States. For more information, please visit
www.sterlite-industries.com
Disclaimer
This press release contains “forward-looking statements” – that
is, statements related to future, not past, events. In this
context, forward-looking statements often address our expected
future business and financial performance, and often contain words
such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “should” or “will.” Forward–looking statements by their
nature address matters that are, to different degrees, uncertain.
For us, uncertainties arise from the behaviour of financial and
metals markets including the London Metal Exchange, fluctuations in
interest and or exchange rates and metal prices; from future
integration of acquired businesses; and from numerous other
matters of national, regional and global scale, including
those of a political, economic, business, competitive or regulatory
nature. These uncertainties may cause our actual future results to
be materially different that those expressed in our forward-looking
statements. We do not undertake to update our forward-looking
statements.
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