Sterlite Industries (India) Limited (“SIIL” or “Sterlite” or
“the Company”) today announced its unaudited consolidated results
for the first quarter (Q1) ended 30 June 2013.
Q1 FY 2014 Highlights
- Mined metal production up 27% and
integrated zinc production up 10% at Zinc India
- Power generation up 34% at the
Jharsuguda 2400 MW Plant
- Strong Balance sheet with cash &
liquid investments of Rs. 25,890 crore
- Merger of Sterlite and Sesa Goa Ltd has
received approval of the High Court of Madras on July 25, 2013
Consolidated
Financial Performance
Q1 Q4
Particulars (In Rs. crore, except as stated)
FY2014
FY2013 % change YoY FY2013 Net
Sales/Income from operations 8,190 10,591 (23%) 12,609 EBITDA 2,173
2,337 (7%) 3,323 Interest expense 362 242 50% 276 Foreign Exchange
(loss)/gain (230) (217) 6% 78 Profit before Depreciation and Taxes
2,647 2,797 (5%) 3,907 Depreciation 526 518 2% 453 Profit before
Exceptional items 2,122 2,279 (7%) 3,454 Exceptional Items - - -
118 Taxes 357 334 7% 418 Profit After Taxes 1,765 1,945 (9%) 2,918
Minority Interest 571 577 (1%) 787 Share in Profit/(Loss) of
Associate (260) (167) 56% (206) Attributable PAT after exceptional
item 934 1,202 (22%) 1,925 Basic Earnings per Share (Rs./share)
2.78 3.57 (22%) 5.73 Underlying Earnings per Share* (Rs./share)
3.17 3.99 (21%) 5.77 Exchange rate (Rs./$) – Average 55.95 54.22 3%
54.17 Exchange rate (Rs./$) – Closing 59.70 56.31
6% 54.39
* Based on profit for the period after adding back exceptional
items and other gains and losses, and their resultant tax and
minority interest effects
Mr. Anil Agarwal, Chairman: “We achieved a strong
performance in the first quarter of FY 2014, and delivered
production growth at our world-class Zinc, Silver, Power and
Aluminium businesses despite global economic volatility and lower
metal prices. We remain focused on completing the merger with Sesa
Goa, and ramping up production from our growth projects across our
world class asset portfolio."
Revenues and EBITDA were lower primarily on account of a
temporary closure of the Tuticorin copper smelter, which was
partially offset by higher power generation at the Jharsuguda 2,400
MW power plant and higher production at Zinc India. Temporary
closure of the Tuticorin smelter negatively impacted EBITDA by Rs.
180 crore.
Attributable PAT and Basic EPS were impacted by lower EBITDA and
higher losses at associate. Higher interest costs on borrowings was
largely offset by increase in other income.
Merger of Sterlite and Sesa Goa Limited
and Vedanta Group Consolidation
The proposed Merger of Sterlite and Sesa Goa Limited and Vedanta
Group Consolidation has received the approval of the High Court of
Madras on July 25, 2013 and the approval of the High Court of
Bombay at Goa on April 3, 2013.
One of the shareholders of Sesa Goa has filed an appeal against
the order passed by the High Court of Bombay at Goa before the
Division Bench of the same court. The hearings before the Division
Bench have been completed and the order is awaited.
Zinc - India
Business
Q1
Q4 Production (in’000 tonnes, or as stated)
FY2014 FY2013 % change YoY
FY2013 Mined metal content 238 187 27% 260
Refined Zinc –
Total 174 161 8% 182 Refined Zinc – Integrated 173 157 10% 181
Refined Lead - Total 1 33 31 5% 35 Refined Lead –
Integrated 29 29 1% 32
Refined Saleable Silver - Total (in
tonnes) 2 96 73 31% 108 Refined Saleable Silver -
Integrated (in tonnes) 77 71 9% 91
Financials (In Rs. crore, except as stated)
Revenue
3 2,874 2,641 9% 3,820 EBITDA
1,440 1,349 7% 2,098 PAT 1,630 1,542 6% 2,174 Zinc CoP without
Royalty (Rs./MT) 46,765 45,759 2% 44,901 Zinc CoP without Royalty
($/MT) 836 844 (1%) 829 Zinc CoP with Royalty ($/MT) 995 1,007 (1%)
998 Zinc LME Price ($/MT) 1,840 1,928 (5%) 2,033 Lead LME Price
($/MT) 2,049 1,974 4% 2,301 Silver LBMA Price ($/oz) 23.1
28.3 (18%) 30.1
1.
Including captive consumption of 1,644
tonnes in Q1 FY 2014 vs. 1,641 tonnes in Q1 FY 2013 and 1,777
tonnes in Q4 FY 2013.
2.
Excluding captive consumption of 8.8
tonnes in Q1 FY 2014 vs. 8.6 tonnes in Q1 FY 2013 and 9.2 tonnes in
Q4 FY 2013.
3.
Including zinc concentrate sale of nil in
Q1 FY 2014 vs. nil in Q1 FY 2013 and 61,097 tonnes metal in
concentrate in Q4 FY 2013.
During Q1, mined metal production was 27% higher than the
corresponding prior quarter. The increase in production was in line
with our plan to deliver 1 million tonne mined metal production for
the year.
Integrated production of refined zinc was 10% higher, due to
higher smelter utilization. Integrated production of refined lead
was in line with the corresponding prior quarter. Integrated
saleable silver production was 9% higher driven by higher volumes
from Sindesar Khurd and Zawar mines.
Revenues were higher by 9% on account of higher sales volume and
depreciation of Indian Rupee, partially offset by lower metal
prices.
The zinc cost of production (COP) without royalty was 2% higher
in Rupee terms and 1% lower in US Dollar terms. The increase in
Rupee COP was primarily due to lower sulphuric acid credits and
higher excavation costs, partially offset by lower coal prices,
lower specific coal consumption and the benefits of higher
volumes.
EBITDA was 7% higher on account of higher volume partially
offset by higher operating costs. PAT for the quarter was 6% higher
at Rs. 1,630 Crore.
Zinc -
International Business
Q1 Q4 Production (in’000 tonnes,
or as stated)
FY2014 FY2013 % change
YoY FY2013 Mined metal content- BMM and Lisheen 56 70
(21%) 65 Refined Zinc – Skorpion 34 36 (4%) 36 Total 90 106 (15%)
102
Financials (In Rs. crore, except as stated)
Revenue 938 1,012 (7%) 1,130 EBITDA 298 337
(12%) 434 PAT 190 190 - 267 CoP – ($/MT) 1,162 1,126 3% 1,121 Zinc
LME Price ($/MT) 1,840 1,928 (5%) 2,033 Lead LME Price ($/MT)
2,049 1,974 4% 2,301
Zinc-Lead Metal in Concentrate (MIC) production was lower on
account of disruptions in production caused by accidents at Lisheen
and BMM.
EBITDA was 12% lower on account of lower volumes, lower metal
prices and marginally higher COP.
Copper – India /
Australia Business
Q1
Q4 Production (in’000 tonnes, or as stated)
FY2014 FY2013 % change YoY
FY2013 Copper - Mined metal content 6 7 (13%) 7 Copper -
Cathodes 16 88 (82%) 86 Tuticorin power sales (million units) 137 -
- 35
Financials (In Rs. crore, except as stated)
Revenue 2,465 5,301 (53%) 5,860 EBITDA (2) 265
(100%) 375 Foreign Exchange gain/(loss) (273) (219) 25% 14
Exceptional items - - - (100) PAT (190) 96 (298%) 322 Tc/Rc
(US¢/lb) 13.9 12.4 12% 14.8 Net CoP – cathode (US¢/lb) NM 5.4 -
10.7 Copper LME Price ($/MT) 7,148 7,869 (9%)
7,931
NM = Not Meaningful.
During Q1, mined metal production at Australia was 13% lower due
to lower grades. Copper cathode production was lower due to a
temporary closure of the Tuticorin smelter for most of the
quarter.
EBITDA was lower due to fixed expenses of the Tuticorin smelter
partially offset by gains on sale of surplus power from the first
80 MW unit of Tuticorin power plant. Contribution from Australian
operations was affected by lower sales volume, lower LME and higher
COP.
Following the Tamil Nadu Pollution Control Board’s (TNPCB) order
for closure of the Tuticorin copper smelter on March 29, 2013, the
National Green Tribunal (NGT) after hearing company's appeal,
passed an interim order on May 31, 2013 conditionally allowing the
smelter to recommence operations, and the plant restarted on June
23, 2013. On July 15, 2013, an expert committee confirmed that the
plant meets the prescribed standards, and the NGT in its order of
even date took cognizance of the findings of the expert committee
and observed that the company "is neither an existing pollutant nor
is a threat of future pollution (not violating prescribed
standards) resulting in health hazards", and declined to modify its
earlier interim order dated 31st May, 2013, enabling the plant to
continue to operate. Separately, the TNPCB has also filed an appeal
against the NGT’s earlier interim order before the Supreme
Court.
Aluminium
Business - BALCO
Q1
Q4 Production (in’000 tonnes, or as stated)
FY2014 FY2013 % change YoY
FY2013 Aluminium 61 60 1% 62
Financials (In Rs. crore, except as stated)
Revenue 745 780 (5%) 954 EBITDA 28 57 (51%) 85
PAT (63) (7) - 20 CoP ($/MT) 1,934 1,910 1% 1,930 CoP (Rs./MT)
108,233 103,542 5% 104,532 Aluminum LME Price ($/MT) 1,835
1,978 (7%) 2,003
During Q1, the Korba-II aluminium smelter continued to operate
at its rated capacity.
Revenues were 5% lower on account of lower sales volume and fall
in metal prices, partially offset by the depreciation of Indian
Rupee.
Net sales realization over LME was $ 445 per tonne during the
quarter.
Aluminium COP was higher primarily on account of further
tapering of coal linkage as per the Coal Block policy and higher
operating cost of captive power plant due to maintenance shutdown
of one of the units of 540 MW Captive Power Plant (CPP). The
increase in aluminium COP on account of further coal tapering was
Rs. 3,900 per tonne of aluminium in Q1 FY2014 as compared to Q1
FY2013.
The BALCO 1,200MW captive power plant is awaiting its consent to
operate. We expect to tap first metal at the 325 ktpa BALCO-III
aluminium smelter in Q3 FY2014. Having obtained both stages of
forest clearance for the BALCO coal block, we are working on
obtaining other approvals which are taking longer than expected,
and we expect to commence mining in Q1 FY2015.
Aluminium
Business – Vedanta Aluminium Limited (Associate
Company)
Q1
Q4 Production (in’000 tonnes, or as stated)
FY2014 FY2013 % change YoY
FY2013 Alumina – Lanjigarh - 218 - - Aluminum – Jharsuguda
134 124 8% 133
Financials
(in Rs. crore except as stated) Revenue
1,630 1,681 (3%) 1,709 EBITDA 260 306 (15%) 261 Interest Expense
765 506 51% 542 Foreign Exchange gain/(loss) (162) (160) 1% (205)
PAT (881) (565) 56% (700) SIIL Share (29.5%) (260) (167) 56% (206)
Aluminium CoP ($/MT) 1,675 1,845 (9%) 1,799 Aluminium CoP (Rs./MT)
93,734 100,020 (6%) 97,496 Aluminium LME Price ($/MT) 1,835
1,978 (7%) 2,003
Aluminium production was 8% higher during the quarter. The
Jharsuguda-I smelter operated at 7% above its rated capacity, with
significant improvements in specific power consumption, throughput
and other operational parameters resulting in a COP lower than the
corresponding prior quarter as well as Q4 FY2013. This was achieved
despite running the smelter with third-party alumina feed as
operations of the Lanjigarh alumina refinery were temporarily
suspended. The refinery has subsequently recommenced its operations
in July.
EBITDA was lower primarily on account of the fixed costs of the
Lanjigarh refinery during the quarter and lower Aluminium LME,
partially offset by higher volumes and lower COP.
Net sales realization over LME was $ 320 per tonne during the
quarter.
PAT was lower by Rs. 316 crore primarily on account of higher
interest cost. Interest cost was higher due to cessation of
interest capitalization pertaining to the Jharsuguda-II smelter on
account of delay in its commissioning, in compliance with the
relevant accounting standard.
Status of
Investment in Vedanta Aluminium Limited as at 30
June 2013
Investment in VAL (Rs. crore)
Sterlite
Vedanta External Total Equity
563 1,391 -
1,954 Preference Shares 3,000 - -
3,000
Quasi Equity / Debt 13,895 571 13,065
27,530 Total
Funding 17,458 1,962 13,065 32,484
Corporate Guarantees 2,287 22,602 -
24,889
In view of the impending merger, the company borrowed Rs. 5,000
crore externally and lent it to VAL, with an objective of
optimizing the overall cost of borrowings for VAL. This has
resulted in retiring a part of the higher cost project finance debt
at VAL.
Power
Business
Q1
Q4 Particulars (in million units)
FY2014
FY2013 % change YoY FY2013
Total Power Sales 2,953 2,458 20% 2,433 SEL 2400 MW
Jharsuguda1 2,604 1,938 34% 2,073 BALCO 270MW Power Sales 187 338
(45%) 282 HZL Wind Power 162 182 (11%) 78
Financials (in Rs. crore except as stated)
Revenue 1,144 857 33% 847 EBITDA 402
329 22% 330 PAT 139 83 68% 110 Average Cost of Generation
(Rs./unit) 2.15 2.02 6% 1.81 Net Average Realization (Rs./unit)
3.49 3.44 1% 3.16 SEL Cost of Generation (Rs./unit) 2.21 2.14 3%
1.76 SEL Net Realization (Rs./unit) 3.45 3.51
(2%) 3.09
1. Includes production under trial run of 202
MU in Q1 FY2013.
Power sales during the quarter were 20% higher on account of
higher power generation from Jharsuguda 2,400MW plant. The plant
operated at PLF of 54% for all four units during the quarter as
compared with 50% for three units during the corresponding prior
period.
Power sales volumes at the BALCO 270 MW plant were lower due to
diversion of 204 million units of power to the Korba-II smelter as
one unit of BALCO 540 MW CPP was under maintenance shutdown.
Average power realization increased to Rs. 3.49 due to higher
sales volume from open access. The power generation cost at SEL
during the quarter was Rs. 2.21 per unit as compared with Rs. 2.14
per unit in corresponding prior quarter.
EBITDA for the quarter was 22% higher, primarily on account of
higher power generation at Jharsuguda 2,400MW plant.
The first unit of the 1,980MW Talwandi Sabo power project is
expected to be synchronized in Q3 FY2014.
Cash, Cash Equivalents and Liquid
Investment
As at 30 June 2013, the company has consolidated cash, cash
equivalents and liquid investments of Rs. 25,890 crore, out of
which Rs. 15,369 crore was invested in debt mutual funds, Rs. 2,217
crore in bonds, and Rs. 8,304 crore in bank deposits. The company
continues to follow a conservative investment policy and invests in
high quality debt instruments with the mutual funds, bonds and
fixed deposits with banks.
Note: Figures in previous periods have been regrouped or
restated, wherever necessary to make them comparable to current
period.
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.
Sterlite Industries has a portfolio of world class assets in India,
Australia, Namibia, South Africa and Ireland. 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.
Regd. Office: SIPCOT Industrial Complex, Madurai Bypass
Road, TV Puram P.O., Tuticorin-628002, Tamil Nadu
Sterlite Industries (India) LimitedAshwin Bajaj, +91 22
6646 1531Senior Vice President – Investor
Relationssterlite.ir@vedanta.co.inSheetal Khanduja, +91 22 6646
1531AGM – Investor Relationssterlite.ir@vedanta.co.in
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