Sterlite Industries (India) Limited (“SIIL” or the “Company”)
today announced its unaudited consolidated results for the first
quarter (“Q1”) ended 30 June 2012.
Q1 Highlights
- Integrated Lead production up 79% and
integrated Silver production up 70% at Zinc India
- Power sales up 49%
- EBITDA at `2,337 crore
- Underlying EPS at `4.2 per share
- Strong balance sheet with cash and
liquid investments of `24,917 crore
- Shareholder approval received for Sesa
Sterlite merger
Financial
Highlights
(In `crore, except as stated)
Particulars Quarter ended
30 June
Change Year ended
31 March
2012 2011
%
2012 Net Sales/Income from Operations 10,591
9,826 8% 40,967 EBITDA 2,337 2,758
(15%) 10,169 Interest Expense 242 164
47% 852 Foreign Exchange Gain/(Loss) (217)
- - (305) Profit before Depreciation and Taxes
(PBDT) 2,797 3,426 (18%) 12,174
Depreciation 518 420 23% 1,830 Profit
before Taxes and Exceptional Items 2,279 3,006
(24%) 10,344 Exceptional Items - 4 -
473 Taxes 334 614 (46%) 2,111
Profit after Taxes 1,945 2,388 (19%)
7,761 Minority Interest 577 642 (10%)
2,161 Share in Profit/(Loss) of Associate (167) (106)
57% (772) Attributable PAT after Exceptional Items
1,202 1,640 (27%) 4,828 Basic Earnings
per Share (EPS) (`/share) 3.6 4.9
14.4 Underlying Earnings per Share (EPS) (`/share) *
4.2 4.9 (14%) 16.7 Average Exchange Rate (`/$)
54.2 44.7 (21%) 47.9
*Underlying EPS excludes foreign exchange
gain/loss and exceptional items
Consolidated Financial
Performance
Revenues for Q1 were up 8% at `10,591 crore primarily due to
increase in volume of Lead and Silver at Zinc India, Commercial
Power and Copper. The drop in LME prices was partially offset by
Rupee depreciation compared with the corresponding prior
quarter.
EBITDA was down 15% at `2,337 crore, largely due to lower metal
prices, lower volume of Zinc, lower power sales at Balco and higher
cost of production in Rupee terms, partially offset by increased
realisation on account of Rupee depreciation by 21% during Q1.
During Q1, profits were impacted by mark to market loss of `217
crore on foreign currency loans and higher interest costs of `78
crore.
Sesa - Sterlite Merger
Further to the approval received from the Stock Exchanges and
the Competition Commission of India, Sterlite received shareholder
approval at the Court Convened Meeting held on 21 June 2012. The
Petition for the Schemes have been filed with and admitted by the
High Court of Madras and High Court of Bombay at Goa. The Schemes
are now subject to the approval of the High Court of Madras, High
Court of Bombay at Goa and Supreme Court of Mauritius.
Zinc India
Business
Particulars
Quarter ended
30 June
Change Year ended
31 March
2012 2011 %
2012 Production (in Kt, except for
silver)
Mined Metal – Zinc and Lead 187 188
(1%) 830 Total Refined Zinc 161 193
(16%) 759 Integrated Zinc 157 191 (18%)
752 Total Refined Lead 1 31 16 91%
99 Integrated Lead 29 16 79% 89
Total Refined Silver 2 (In ‘000 Kgs) 82 47 75%
242 Integrated Silver (In ‘000 Kgs) 79 47
70% 237
Financials
Revenue (` Cr) 2,641
2,784 (5%) 11,132 EBITDA (` Cr) 1,349
1,554 (13%) 5,993 Other Income (` Cr) 574
360 59% 1,543 PAT (` Cr) 1,542
1,479 4% 5,506 Zinc CoP without Royalty ($/MT)
844 874 3% 834 Zinc CoP with Royalty ($/MT)
1,007 1,063 5% 1,010 Zinc LME ($/MT)
1,928 2,250 (14%) 2,098 Lead LME ($/MT)
1,974 2,550 (23%) 2,269 Silver LBMA
($/oz) 28 38 (26%) 35
1 Including captive consumption of 1,641
tonnes in Q1 FY 2013 vs 1,391 tonnes in Q1 FY 2012.
2 Including captive consumption of 8,643
Kgs in Q1 FY 2013 vs 7,196 Kgs in Q1 FY 2012.
During Q1, mined metal production at 187,000 was in line with
the current year mine plan. Mined metal output at Sindesar Khurd
(SK) mine increased by around 60% from a year ago, offsetting
planned lower output from Rampura Agucha mine. In line with the
mine plan and as announced earlier, production in the first half of
FY2013 is expected to be marginally lower than that in the
corresponding prior period, but will be more than made up in the
second half of FY2013.
Integrated refined Lead and Silver production in Q1FY2013
increased 79% and 70% from a year ago, to 29,000 tonnes and 79
tonnes respectively. The increase was primarily due to ramp-up of
the SK mine and stabilization of the new Lead and Silver refining
capacities. Integrated refined Zinc production at 157,000 tonnes
was in line with the mine plan.
Revenues for Q1 FY2013 were `2,641 crore, down 5% compared with
the corresponding prior quarter, reflecting the positive impact of
higher Lead and Silver volumes, Rupee depreciation, lower Zinc
volume and lower prices of Zinc, Lead and Silver.
The cost of production of Zinc, excluding royalty, during the
quarter was `45,759 per tonne ($844 per tonne), compared with
`39,117 per tonne ($874 per tonne) in the corresponding prior
quarter. The increase in the cost of production was mainly due to
the depreciation of Indian Rupee, planned increase in strip ratio
at Rampura Agucha mine and lower by-product credits. Consequently,
EBITDA during Q1 was lower at `1,349 crore compared with `1,554
Crore during the corresponding prior quarter.
Expansion Projects
Zinc India continues to progress well on the underground mine
development at Rampura Agucha and Kayar mine. Developmental ore
from Rampura Agucha underground and Kayar mines is expected in the
second half of FY2013. Commercial production from both these mines
will start next year. Zinc India is in the advanced stages of
developing technical feasibility of its next phase of
expansions.
Zinc
International Business
Particulars
Quarter Ended 30 June Change
Year ended
31 March
2012 2011 %
2012 Production (Kt)
Mined Metal Content (MIC)- BMM &
Lisheen 70 80 (12%) 299 Refined Metal –
Skorpion 36 39 (7%) 145
Total
106 118 (10%) 444
Financials
Revenue (`Cr)
1,012 1,060 (5%) 4,258 EBITDA (`Cr)
337 517 (35%) 1,753 PAT (`Cr)
190 317 (40%) 1,034 CoP – ($/MT) 1,111
1,189 7% 1,165 Zinc LME ($/MT) 1,928
2,250 (14%) 2,098 Lead LME ($/MT) 1,974
2,550 (23%) 2,269
In Q1, total production of Zinc-Lead metal-in-concentrate and
Zinc metal was in line with our earlier guidance. The total
production of 106,000 tonnes comprised 70,000 tonnes of Zinc and
Lead metal-in-concentrate (MIC) at Lisheen and BMM and 36,000
tonnes of refined Zinc at Skorpion.
During Q1, revenue and EBITDA at our Zinc-International business
were `1,012 crore and `337 crore respectively. EBITDA was 35% lower
due to lower metal prices and volume.
Copper
Business
Particulars Quarter Ended
30 June
Change Year ended
31 March
2012 2011
%
2012 Production (Kt)
Mined Metal Content – Australia
7 6 13% 23 Cathodes – India
88 74 19% 326
Financials
Revenue (` Cr) 5,301 4,631
14% 20,166 EBITDA (` Cr) 265 331
(20%) 1,498 Foreign Exchange gain/(loss) (` Cr)
(258) (2) (262) PAT (`
Cr) 96 393 (86%) 1,155 Net CoP –
cathode (USc/lb) 5.4 (2.9)
0.0 Tc/Rc (¢/lb) 12.4 13.9 (11%)
14.5 LME ($/MT) 7,869 9,125
(14%) 8,475
Mined metal production at the Australian mine was up by 13% at
7,000 tonnes. Copper cathode production at the Tuticorin smelter
was 88,000 tonnes.
In Q1, net cost of production was higher at 5.4 c/lb compared
with (2.9) c/lb in the corresponding prior period primarily on
account of lower realization of by-products.
EBITDA for Q1 was lower at `265 crore primarily due to higher
net cost of production and lower Tc/Rc, partially offset by higher
volume.
The first 80 MW unit of the captive power plant at Tuticorin is
expected to be synchronized in the current quarter.
Aluminium
Business (BALCO)
Particulars
Quarter ended
30 June
Change Year ended
31 March
2012 2011
%
2012 Production (Kt)
Aluminum 60 61
(1%) 246
Financials
Revenue (` Cr) 780 757 3%
3,043 EBITDA (` Cr) 57 191 (70 %)
374 PAT (` Cr) (7) 145
157 CoP ($/MT) 1,910 1981 4% 1,997 LME
($/MT) 1,978 2600 (24%) 2,313
The Balco aluminium production was stable at 60,000 tonnes in
Q1. Revenue in Q1 of `780 crore was in line with the corresponding
prior period as higher realization on account of Rupee depreciation
and improved product mix partly offset by the impact of lower
aluminum prices.
During Q1, aluminium cost of production was `103,542 per tonne
($1,910 per tonne) compared with `88,642 per tonne ($1,981 per
tonne) in the corresponding prior period. The increase in COP was
on account of tapering of coal linkage and higher costs of Alumina
and Carbon which reduced EBITDA to `57 crore compared with `191
crore in the corresponding prior quarter.
The first 300 MW unit of the 1200 MW captive power plant at
BALCO is expected to be synchronized in the current quarter. The
first metal tapping from the 325 ktpa BALCO-III Aluminium smelter
is expected by Q3 FY2013.
We have received Environment Clearance for BALCO coal block in
May 2012. Subject to Second Stage Forest Clearance which is
progressing well, we expect to commence mining this year.
Vedanta Aluminium
Limited
Particulars
Quarter Ended
30 June
Change Year Ended
2012 2011
% 2012
Production (kt)
Alumina (kt) 218 224 (3%)
928 Aluminium (kt) 124 112 11% 430
Financials
Revenue (` Cr) 1,681 1,498 12%
5,834 EBITDA (` Cr) 83 211 (61)% 563
PAT (` Cr) (565) (360) (57%) (2,618)
SIIL Share as an associate (` Cr) (167) (106)
(59%) (772) Alumina COP ($/MT) 334 347
4% 350 Aluminium COP ($/MT) 1,845 2,344
21% 2,188 LME ($/MT) 1,978 2,600 (24%)
2,313
During Q1, Lanjigarh refinery produced 218,000 tonnes of alumina
with bauxite from BALCO and third party purchases. Aluminium
production at Jharsuguda was 11% higher at 124,000 tonnes as
compared with corresponding prior quarter.
The cost of production at VAL in Q1 was `100,020 per tonne
(US$1,845 per tonne) compared with `104,853 per tonne (US$2,344 per
tonne) in the corresponding prior quarter, lower by 5 % in Rupee
terms due to higher production and better operational
efficiencies.
EBITDA was adversely impacted by `100 crore on account of
interest differential as per AS 16 and `80 crore of mark to market
loss on creditors and loans due to foreign exchange fluctuation.
EBITDA excluding these items was `263 crore.
Aluminium premiums have risen substantially year on year on
account of shortage of primary metal in the physical market due to
capacity cutbacks. Premium over LME on aluminium ingot has improved
significantly during the quarter to more than $200 per tonne.
Status of Investment in VAL (Associate
Company) as at 30 June 2012
In `
Crore
Sterlite Vedanta
External Total Equity 563
1,391 - 1,954
Preference Share Capital
3,000 - - 3,000
Quasi Equity / Debt
6,942 2,374 18,571 27,887
Total
funding 10,505 3,765
18,571 32,841 Corporate Guarantees
4,538 23,382 - 27,921
Power
Particulars
Quarter ended
30 June
Change Year ended
2012 2011
% 2012
Merchant sales (mn units)
SEL * 1,938 1,123 73%
5,638 Balco 270 MW 338 424 (20%)
1,605 Wind Power 273 MW 182 105 72% 336
Total 2,458 1,652 49% 7,578
Financials
Revenue (` Cr) 857 592 45% 2,572
EBITDA (` Cr) 329 166 98% 686 PAT (`
Cr) 83 50 64% 163 Average Power CoP (`/
unit) 2.02 2.57 21% 2.40 Average Power
Realization (`/unit) 3.44 3.55 (3%)
3.39 SEL CoP (`/unit) 2.14 2.86 25%
2.62 SEL realization (`/unit) 3.51 3.49 1%
3.42
* 202 MU in Q1 FY2013 and 140 MU in Q1
FY2012 generated under trial run
Power sales were higher at 2,458 million units in Q1, compared
with 1,652 million units during the corresponding prior quarter, on
account of sales from the three 600 MW units of the 2,400 MW
Jharsuguda power plant of Sterlite Energy Ltd (SEL). The fourth
unit is currently under trial runs and is expected to be
commissioned in the current quarter.
Wind power generation increased by 72% on account of increase in
generation capacity.
The generation cost at SEL during the quarter was `2.14 per unit
compared with `2.86 per unit in corresponding prior quarter, from
stable plant operations.
EBITDA for Q1 was 329 crore was higher compared with the
corresponding prior quarter on account of higher volume and lower
costs at SEL.
During the quarter, we commissioned an additional 700MW
transmission capacity at SEL, taking our total capacity to 1,850MW,
which will help to achieve higher PLF. In Q4 FY2013, we expect to
commission an additional 1,000MW transmission capacity which will
help to achieve capacity PLF.
Expansion Projects
Work at the 1,980 MW power project at Talwandi Sabo is
progressing as scheduled, with the first unit targeted to be
synchronized by Q4 FY2013.
Depreciation
Depreciation cost for the quarter was higher at `518 crore as
compared to `420 crore during the corresponding prior quarter due
to the capitalization of new plants at Zinc India operations and
SEL.
Cash, Cash Equivalents and Liquid
Investments
The Company follows a conservative investment policy and invests
in high quality debt instruments in form of mutual funds and fixed
deposits with banks. As at 30 June 2012, the Company had cash, cash
equivalents and liquid investments of `24,917 crore, out of which
`14,206 crore was invested in debt mutual funds and bonds, and
`10,711 crore was in fixed deposits and bank balances.
Regd. Office: SIPCOT Industrial Complex, Madurai Bypass
Road, TV Puram P.O., Tuticorin-628002, Tamilnadu
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. 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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