MUMBAI, India, October 29, 2014 /PRNewswire/ --
Attributable PAT* up
15%
Sesa Sterlite Limited ("Sesa Sterlite" or the "Company") today
announced its unaudited consolidated results for the second quarter
(Q2) ended 30 September
2014.
(Logo:
http://photos.prnewswire.com/prnh/20140117/663814 )
Financial Highlights
- Q2 FY2015 Revenues up 8% at Rs 19,448
crore
- EBITDA at Rs. 6,381 crore; continued strong EBITDA
margin of 46%(1)
- Attributable PAT excluding exceptional items up 15% at Rs.
1,658 crore
- Strong balance sheet with Cash & Cash equivalents of over
Rs. 47,000 crore
Operational Highlights
- Improving production rate at Zinc-India, Copper-India, Oil
& Gas
- Zinc-India: Mined metal improving as per
mine-plan; H2 output to be significantly higher
- Oil & Gas: RJ production normalised after
planned maintenance shutdown at MPT
- Strong operating performance at Aluminium and commissioning of
new pot-lines in progress
- Continued focus on cost control and efficiency improvements
across businesses
- Rajasthan oil & gas development on track for Mangala EOR
injection and gas ramp-up
Mr. Tom Albanese, Group
CEO: "We have delivered a strong performance in the second
quarter with an 8% growth in revenue and a 15% growth in profits.
Strong EBITDA margins were maintained at 46%, while Attributable
PAT (excluding exceptional items) was up 15%. Main performance
drivers during the quarter were Copper, Aluminium and Zinc India
businesses, while Oil & Gas production at Rajasthan has
normalised after completion of the maintenance shutdown at the
Mangala Processing Terminal. Combined with efficient cost
management, we are focused on optimising our assets and generating
strong cash flows. I am confident that Sesa Sterlite will continue
to create value for all stakeholders."
*Excluding exceptional items on proforma basis post Sesa
Sterlite merger
(1)Excludes custom smelting at Zinc and
Copper India operations
Consolidated Financial Performance
The Sesa Sterlite merger and the Vedanta Group consolidation was
completed in August 2013, hence Q2
and H1 FY2015 performance is compared with the adjusted proforma
numbers of respective period, which are more representative of the
performance during the period.
(In Rs. crore, except as
stated)
FY2014
(Adjusted
Proforma) Q2 Q1 H1
FY 2014
FY 2014 FY 2015
FY2015 (Adjusted % FY2015 (Adjusted %
Particulars (Actual) Proforma) Change (Actual) Actual Proforma) Change
Net
Sales/Income
72,591 from operations 19,448 18,026 8 % 17,056 36,504 32,387 13%
25,665 EBITDA 6,381 6,955 (8%) 5,670 12,051 12,434 (3%)
47% EBITDA margin1 46% 49% - 47% 46% 47% -
6,111 Finance cost 1,472 1,473 - 1,537 3,009 3,044 (1%)
2,210 Other Income 686 459 49% 1,210 1,897 1,059 79%
505 Forex gain 260 235 11% 141 401 453 (11%)
Profit before
Depreciation
21,999 and Taxes 5,801 6,030 (4%) 5,416 11,218 10,606 6%
5,584 Depreciation 1,534 1,398 10% 1,544 3,078 2,700 14%
Amortisation of
2,840 goodwill 469 654 (28%) 520 990 1,238 (20%)
Profit before
Exceptional
13,576 items 3,798 3,979 (5%) 3,352 7,150 6,668 7%
Exceptional
229 Items2 90 62 46% 1,627 1,718 62 -
1,000 Taxes 560 501 12% 362 922 811 14%
Profit After
12,347 Taxes 3,148 3,416 (8%) 1,363 4,510 5,795 (22%)
Minority
7,342 Interest 1,528 2,014 (24%) 988 2,516 3,793 (34%)
Attributable
PAT before
exceptional
5,207 item 1,658 1436 15% 1,341 2,999 2,036 47%
Basic Earnings
per Share
16.88 (Rs./share) 5.46 4.73 15% 1.27 6.73 6.75 -
Basic Earnings
per Share
without
exceptional
items
17.58 (Rs./share) 5.59 4.94 13% 4.52 10.12 6.87 51%
Exchange rate
(Rs./$) -
60.5 Average 60.6 62.1 (2%) 59.8 60.2 59.1 2%
Exchange rate
(Rs./$) -
60.1 Closing 61.6 62.8 (2%) 60.1 61.6 62.8 2%
- Excludes custom smelting at Zinc and Copper India
operations
- Exceptional items for the quarter is reflected net of
tax
Revenue
Revenue in Q2 was at Rs 19,448
crore, up 8% in the quarter as compared to Q2 FY2014. The
increase was mainly driven by improved volume at Copper India (Rs.
1,153 crore) post planned maintenance
shutdown for 23 days in Q1 FY2015. Higher LME prices and premia in
Aluminium and Zinc India business also helped to improve revenue
(Rs. 732 crore). Iron Ore was
marginally stronger (Rs. 135 crore)
due to higher pig iron output & sale. Cairn India revenue however reduced (Rs.
668 crore) due to lower volume
resulting from a planned maintenance shutdown as well as lower
brent. Australian copper mines continued to remain under Care and
Maintenance resulting in lower revenue. The revenue percentage
increase is higher in H1 as compared to corresponding prior period
primarily because Sterlite Copper was under temporary closure in Q1
FY 2014.
EBITDA and EBITDA Margin
Q2 EBITDA at Rs. 6,381 crore is
down 8% compared with Q2 FY2014 with margin (excluding custom
smelting) continuing to remain strong at 46%. Margins were lower
primarily due to Oil & Gas given the weaker crude oil prices.
Better price in Zinc and Aluminium were offset by higher costs due
to lower volumes (per mine plan) in Zinc-India and higher coal/input costs in
aluminium.
The revenue growth of 8% does not translate into EBITDA growth
of same proportion, given due to the lower volumes in higher margin
businesses like zinc-India, Oil
& Gas marginally offset by higher volumes/revenue in custom
refining business. Also, the increase in royalty rates from
1 September 2014 impacted cost at
Zinc India.
Depreciation and Amortisation
Depreciation and amortisation is marginally lower than Q2
FY2014. Depreciation has increased in Q2 by Rs. 136 crore compared with Rs. 1,534 crore in Q2 FY2014, most of the increase is
due to higher depreciation charge in Cairn India on account of
change in depreciation method from Straight Line Method (SLM) to
Unit of Production (UOP) on tangible assets in line with Indian
Company's Act requirement. There was lower amortisation of goodwill
by Rs. 185 crore due to lesser
production in Zinc International & Cairn India and no
production from Australian mines.
The Companies Act 2013 in Schedule II specifies the useful life
of assets. It mentions depreciation rates for plant and machinery
used in manufacture of non ferrous metals and power plants. The
rates for plant and machinery are lower at 2.38% as compared to the
existing rate used of 5.28%. The company would review with a
technical evaluation and assess the revised useful lives of assets
and charge depreciation accordingly w.e.f. 1
April 2014.
Other Income
In Q2, other income at Rs. 686
crore increased by Rs. 227
crore compared to Q2 FY2014. Sequentially it is lower,
mainly due to the timing of maturity of investments in Fixed
Maturity Plans (FMPs) at Zinc India and Cairn India in Q1
FY2015.
Non-Operational Forex Loss/Gain
Rupee depreciated marginally and closed at Rs.61.61 during the current quarter. There is
marginal difference in Forex gain as compared to Q2 FY2014.
However, this has resulted in higher forex gain in Cairn India as
compared to Q1 FY2015 on dollar denominated investments and
advances/debtors.
Exceptional Items
In Q2, there were exceptional items of Rs. 90 crores, of which Rs. 45
crore relates to expenditure written off pursuant to the
Supreme Court judgement in September
2014 cancelling 214 coal block allocations made since 1993
which included all our three coal blocks. The balance amount of Rs.
45 crore is expenditure towards
Voluntary retirement Scheme (VRS) at Balco.
Tax
Tax charge in the current quarter is Rs. 560 crore (tax rate 14.7% excluding exceptional
items) compared with Rs. 501 crore
(tax rate 12.6%) in Q2 FY2014. The increase in the effective tax
rate is due to higher deferred tax liability on
exploration/development spending at Cairn India.
Profit after Tax
Attributable PAT before exceptional items for Q2 FY2015 was 15%
higher at Rs. 1,658 crore as compared
to Rs. 1,436 crore in Q2 FY2014. The
minority interest in Q2 is lower at 49% compared to 59% in Q2
FY2014, in line with our expectation due to improved performance of
Aluminium and Copper at Sesa Sterlite Standalone.
Borrowings and Investments
Gross debt at Sesa Sterlite reduced by ~Rs.500 crore at Rs. 79,526 crore as at 30
September 2014 which was at Rs. 80,028 crore as at 30 June
2014. This comprises long term loans of Rs. 65,440 crore and short term working capital loans
of Rs. 14,086 crore. Out of total
loan of Rs. 79,526 crore, Rs.
40,186 crore loan is in Sesa Sterlite
standalone and balance Rs. 39,341
crore in the other subsidiaries. The loan in INR currency is
Rs. 33,325 crore and balance Rs.
46,202 crore is in US dollar.
FCCB of US$717 million is maturing
on 31 October 2014. The repayment of
the same has been tied up through a combination of internal cash
and borrowings.
The intercompany facility of US$1.25
billion from Cairn India Limited to a wholly owned overseas
subsidiary of the company has been utilised to pay US$ 800 million principal and balance amount for
accrued interest of the intercompany debt extended from Vedanta
Resources Plc.
Out of the company's cash, cash equivalents and liquid
investments of Rs. 47,107 crore, Rs.
32,727 crore was invested in debt
mutual funds, Rs. 7,538 crore in
bonds, and Rs. 6,842 crore in bank
deposits. Net debt remained constant at Rs. 32,419 crore.
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. The Company has its long-term
rating at AA+/Stable from CRISIL.
Dividend
The Board has recommended an interim dividend of Rs. 1.75 per
share. The interim dividend outgo will be Rs.519 crore. The record date for dividend
payment is 5th November, 2014.
Oil and Gas Business
Q2 Q1 H1
% change % change
Particulars FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
OIL AND GAS (boepd)
Average Daily Total Gross
Operated Production
(boepd) - including
internal gas consumption 204,128 221,190 (8%) 226,597 215,301 220,884 (3%)
Average Daily Gross
Operated Production
(boepd) 194,508 213,299 (9%) 217,869 206,125 212,873 (3%)
Rajasthan 163,262 175,478 (7%) 183,164 173,158 174,503 (1%)
Ravva 20,596 29,151 (29%) 23,940 22,259 28,704 (22%)
Cambay 10,651 8,671 23% 10,765 10,708 9,666 11%
Average Daily Working
Interest Production
(boepd) 123,178 132,862 (7%) 137,907 130,502 132,477 (1%)
Rajasthan 114,283 122,835 (7%) 128,215 121,211 122,152 (1%)
Ravva 4,634 6,559 (29%) 5,386 5,008 6,458 (22%)
Cambay 4,260 3,468 23% 4,306 4,283 3,866 11%
Total Oil and Gas
Production (million boe)
Oil & Gas- Gross 17.89 19.62 (9%) 19.83 37.72 38.96 (3%)
Oil & Gas-Working
Interest 11.33 12.22 (7%) 12.55 23.88 24.24 (1%)
Financials (In Rs. crore,
except as stated)
Revenue 3,982 4,650 (14%) 4,483 8,465 8,713 (3%)
EBITDA 2,701 3,619 (25%) 3,120 5,821 6,668 (13%)
Average Price Realisation
- Oil & Gas ($/boe) 91.3 95.2 (4%) 97.0 94.3 94.3 -
Brent Price ($/bbl) 102 110 (8%) 110 106 106 -
* Includes internal gas consumption
In Q2 FY2015, average gross operated production and working
interest production were 9% and 7% lower year on year (yoy) at
194,508 boepd and 123,178 boepd, respectively. At Rajasthan, we
successfully completed the planned shutdown announced in Q1, for
routine operational and statutory maintenance activity at the
Mangala Processing Terminal, which resulted in lower production of
163,262 boepd, with Development Area (DA)-1 and DA-2 producing
gross averages of 134,539 boepd and 28,723 boepd respectively.
Excluding the shutdown period, Q2 production
was comparable to Q1 and production levels are
back to normal now. We also utilized this opportunity to
tie-in new facility enhancements related to development
projects.
At Ravva, gas sales have been suspended since 4 July 2014 on account of one of the customers
undertaking a major unplanned maintenance activity within their
Andhra Pradesh pipeline network. Hence, production at Ravva was
lower at 20,596 boepd during the quarter despite a positive oil
contribution from the 4D infill well campaign. The gas sales have
recommenced on 15 October 2014.
At Cambay, production increased by 23% yoy at 10,651 boepd
during Q2 on account of successful well intervention measures
undertaken in the previous quarter.
Average gross production for H1 FY2015 was 206,125 barrels of
oil equivalent per day (boepd), 3% primarily due to the reasons
stated above.
EBITDA in Q2 at Rs 2,701 crore was
lower than Q2 FY2014 due to lower volumes, lower oil prices
with a higher profit petroleum tranche at the Rajasthan block in
addition to one off maintenance expenses due to shutdown and higher
exploration expenses. The operating expense in Rajasthan continues
to be at single digit at US$ 6.3/bbl
for Q2 FY2015. Sequential EBITDA is driven by the volumes and
softer brent in the current quarter.
Development and Exploration Projects
Rajasthan Exploration: 3 discoveries were made in Q2, taking the
total to 11 new discoveries since resumption of exploration in
March 2013 and a total of 36
discoveries so far. Cairn India has established 1.4 bn boe
(barrel of oil equivalent) of hydrocarbons in-place to date, tested
and announced, an additional 0.6 bn boe discovered but yet to be
tested, much ahead of the 3 year drill-out target of 3 bn boe.
Through the remainder of the financial year exploration and
appraisal activity continues to be focused upon appraisal of the
Raag Deep Gas Field and key oil discoveries at Raageshwari
and Guda, DP, NL and V&V, flow testing the backlog of
exploration discoveries made to date and drilling high impact
exploration prospects aimed at adding significant resources. In
addition focus will be on horizontal well drilling to accelerate
early production.
EOR Project: The project for first injection of polymer at
Mangala continues to be on schedule. The Mangala ASP pilot has been
successful and expected to be concluded by Q4. Further the FDP for
full field EOR at Bhagyam is being reviewed by our JV partner.
MPT De-bottlenecking: Two phase plan is in place for MPT
"de-bottlenecking" and proceeding per plan. Phase I of
handling 800,000 barrels liquid per day was commissioned ahead of
schedule in Q2 FY2015. We plan to increase the capacity to 1
million barrels per day in the next phase.
Salaya Bhogat Pipeline: Commissioning of gas pipeline is in
final stages of completion with the terminal readiness expected in
Q3 FY2015. Adding sea routes for crude evacuation will give access
to significant additional refining capacity in India
Barmer Hill (BH) and Satellite fields: Cairn India is on track
with Barmer Hill project with 4 wells drilled, fracced and put
under long term production testing. We also drilled 2 Horizontal
wells and undertook a total of 20 fracc jobs during the period. The
results so far have been in line with expectations and encouraging
for tight oil development in the block.
During this quarter, two additional satellite fields i.e. NI and
Guda have been brought online as planned. NI initial well
performance has indicated further upside potential and additional
wells are planned for the current financial year to capture this
potential. In the upcoming quarter, additional wells from NI / Guda
as well as new fields NE, Tukaram are expected to be brought into
production.
Raageshwari Deep Gas : It is planned to double gas
production from the current ~12 mmscfd, by the end of this fiscal
year. FDP for further ramp up to 100 mmscfd has been approved
by the Operating Committee (OC) and submitted to the
Management Committee (MC). The tendering process has commenced for
building a new terminal, 30" gas pipeline and for
availing rig and frac services.
Zinc India
Q2 Q1 H1
Particulars (in'000 tonnes, or % change % change
as stated) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
Mined metal content 213 222 (4%) 163 376 459 (18%)
Refined Zinc - Total 181 196 (8%) 141 321 370 (13%)
Refined Zinc - Integrated 174 195 (11%) 139 312 368 (15%)
Refined Zinc - Custom 7 1 - 2 9 2 -
Refined Lead - Total 1 30 30 - 31 61 61 -
Refined Lead - Integrated 26 29 (12%) 22 47 56 (16%)
Refined Lead - Custom 5 1 - 9 14 5 -
Saleable Silver - Total (in
tonnes) 2 80 90 (11%) 82 162 186 (13%)
Saleable Silver - Integrated
(in tonnes) 67 83 (19%) 56 123 160 (23%)
Saleable Silver - Custom (in
tonnes) 13 6 - 27 39 26 -
Financials (In Rs. crore,
except as stated)
Revenue 3,682 3,460 6% 2,904 6,586 6,334 4%
EBITDA 1,933 1,844 5% 1,296 3,229 3,284 (2%)
Zinc CoP without Royalty
(Rs./MT) 55,200 50,500 9% 60,100 57,300 48,600 18%
Zinc CoP without Royalty ($/MT) 910 816 12% 1,005 952 822 16%
Zinc CoP with Royalty ($/MT) 1,116 975 15% 1,178 1,144 981 17%
Zinc LME Price ($/MT) 2,311 1,859 24% 2,074 2,196 1,850 19%
Lead LME Price ($/MT) 2,181 2,102 4% 2,096 2,140 2,076 3%
Silver LBMA Price ($/oz) 19.8 21.4 (7%) 19.6 19.7 22.2 (11%)
- Excludes captive consumption of 1,762 tonnes in Q2 FY2015
and 3,451 tonnes in H1 FY2015 vs 1,700 tonnes in Q2 FY2014 and
3,344 tonnes in H1 FY2014.
- Excludes captive consumption of 9.1 tonnes in Q2 FY2015 and
17.8 tonnes in H1 FY2015 vs.9.0 tonnes in Q2 FY2014 and 17.8 tonnes
in H1 FY2014.
Mined metal production in Q2 FY2015 was up 30% sequentially at
212,575 tonnes, as compared with 163,131 tonnes in the previous
quarter and down 4% from 221,646 tonnes a year ago. For six month
period, mined metal production was 375,706 tonnes as compared to
459,471 tonnes in H1 FY2014. This is in line with our mine plan at
Rampura Agucha of lower mined metal production in the first half of
the year as we excavated more waste than ore and exposed the ore
body by September; this will contribute higher volumes in the
second half of the year.
Integrated production of refined zinc, lead and silver were up
sequentially by 25%, 18% and 21% respectively but were down on year
on year basis due to planned lower MIC production in H1 and smelter
shutdowns.
The zinc metal cost of production before royalty during the
quarter was Rs. 55,200 per tonne ($910), which is higher by 9% (12% in USD terms)
from a year ago, though it improved significantly from Q1. The
increase is attributed to lower production volumes, smelter
shutdown costs, increased one time and ongoing employee expense on
account of long-term wage agreement, higher coal/power costs and
higher mine development expenses, partly offset by higher credits
and rupee appreciation.
The royalty rates have been increased wef 1 September 2014 for Zinc from 8.4% to 10% and
for Lead from 12.7% to 14.5%.
The long term wage agreement will result in an increase of
$16 per MT on zinc cost of production
on a recurring basis, which is already factored in the above
mentioned COP.
EBITDA was up 5% to Rs. 1,933
crore in Q2 FY2015 compared to Q2 FY2014, primarily due to
higher LME prices despite lower volumes and the recent increase in
royalty rates.
Expansion Projects
All expansion projects are advancing well although the progress
of Rampura Agucha underground was slower than expectation in H1.
Underground mine development rates at Rampura Agucha are expected
to improve during H2 due to enhancement in productivity and
resources. To mitigate the risk of delay in expansion projects,
mine design and planning for further deepening of the pit at
Rampura Agucha is under progress, which will extend the life of the
open pit. The preparatory work for pit deepening is likely to be
initiated in the last quarter.
Shaft sinking at Sindesar Khurd is ahead of schedule and has
reached a depth of 950m while Rampura Agucha main shaft has reached
a depth of 430m. Paste fill plants at these locations were
completed and capitalised during the quarter.
During the quarter, environmental clearance was received for
enhancement of production capacity of Kayad mine from 0.35 MTPA to
1.0 MTPA.
Outlook
We reiterate our guidance of marginal growth in mined metal and
silver production in FY2015. Integrated zinc-lead metal production
is expected to witness a strong growth in H2 over H1, in line with
mined metal production growth.
Zinc International
Q2 Q1 H1
%
Particulars (in'000 tonnes, or as % change change
stated) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
Zinc International 79 106 (26%) 84 163 196 (17%)
Refined Zinc - Skorpion 27 35 (22%) 33 60 69 (13%)
Mined metal content - BMM and
Lisheen 52 71 (27%) 51 103 127 (19%)
Financials (In Rs. crore, except
as stated)
Revenue 986 1,147 (14%) 866 1,852 2,085 (11%)
EBITDA 329 393 (16%) 232 562 691 (19%)
CoP - ($/MT) 1,376 1,059 30% 1,272 1,331 1,122 19%
Zinc LME Price ($/MT) 2,311 1,859 24% 2,074 2,196 1,850 19%
Lead LME Price ($/MT) 2,181 2,102 4% 2,096 2,140 2,076 3%
Refined zinc metal production at Skorpion was lower than the
corresponding prior quarter due to unplanned maintenance activities
at the mill. Zinc-lead mined metal production was lower mainly at
Lisheen due to lower grades as per mine plan sequencing.
CoP increased to USD 1,376 per
tonne as compared to USD 1,059 per
tonne due to reduced volumes.
EBITDA at Rs. 329 crore was 16%
lower than the corresponding quarter due to lower volumes and
shifting of sale of a metal parcel at Skorpion to Q3, affecting the
EBITDA by Rs. 68 crore which is to be
viewed as timing issue. Higher zinc prices though helped partially
offset the adverse impact.
Projects
The project at Gamsberg is under final stages of review after
completion of detailed feasibility study and the work on
feasibility study for the Skorpion refinery is underway.
Outlook
We expect the FY2015 production at approximately 345 ktpa.
Iron Ore
Q2 Q1 H1
%
Particulars (in million dry % change change
metric tonnes, or as stated) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
IRON ORE
Sales 0.6 - - 0.5 1.1 - -
Goa - - - - - - -
Karnataka 0.6 - - 0.5 1.1 - -
Production of Saleable Ore 0.3 - - - 0.3 - -
Goa - - - - - - -
Karnataka 0.3 - - - 0.3 - -
Production ('000 tonnes)
Pig Iron 154 129 19% 146 300 238 26%
Financials(In Rs. crore, except
as stated)
Revenue 604 459 32% 477 1,081 822 31%
EBITDA 96 (78) - 47 144 (125) -
At Goa, the State Cabinet has
approved a new policy for grant of mining leases in October. The
policy states that the leases will be categorized and renewed and
will not be auctioned. Earlier, the High Court of
Bombay at Goa had directed the State Government to renew
mining leases for the mines that have paid the stamp duty, and we
are working with the state government to resume mining in Q4
FY2015.
At Karnataka, we had resumed production in December 2013 and since then we have produced 1.8
mt and sold 1.08 mt through e-auctions till 30 September 2014, of which 0.3mt production and
0.6mt sales were in Q2 FY2015. The mine is not producing or selling
ore since August 2014 and is awaiting
forest clearance and mining lease renewal, which is expected to be
received in Q3. Overall, we expect to produce at our provisional
annual capacity of 2.29 million tonnes during the year.
Production of pig iron was 19% higher as compared to
corresponding prior quarter as production ramped up. EBITDA at Rs.
96 crore was primarily on account of
strong volume growth and better realisation of the pig iron
business. The cost of production of pig iron also reduced as
compared to Q2 FY2014.
At Liberia, a part of our team
has been temporarily moved out of the country and we continue to
monitor the Ebola epidemic. The local Government is focused on
containing the situation and our Liberian team is working with the
Government on infrastructure solutions for an early phase mining
operation.
EBITDA was positive at Rs. 96
crore due to inventory sale as well as higher contribution
from the pig iron business.
Copper India/Australia
Q2 Q1 H1
Particulars (in'000 tonnes, % change % change
or as stated) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
Copper - Mined metal content - 6 - - - 12 -
Copper - Cathodes 100 82 22% 66 166 98 70%
Tuticorin Power Plant Sales
(MU) 183 158 16% 136 319 295 8%
Financials (In Rs. crore,
except as stated)
Revenue 6,286 4,812 31% 4,855 11,141 7,277 53%
EBITDA 466 421 11% 90 556 428 30%
Net CoP - cathode (USCent/lb) 3.1 8.4 (64%) 8.9 4.8 13.5 (64%)
Tc/Rc (USCent/lb) 20.8 14.7 42% 18.8 20.0 14.6 38%
Copper LME Price ($/MT) 6,994 7,073 (1%) 6,787 6,894 7,110 (3%)
Copper cathode production was 22% higher than Q2 FY2014 with the
Tuticorin smelter delivering record production since its planned
shutdown in Q1. In Q2, the business delivered strong operational
efficiency.
The 160MW power plant at Tuticorin continued to operate
efficiently at a Plant Load Factor (PLF) of 94% in Q2 and 82% in
H1.
As previously announced, our Australian mine was put on care and
maintenance in July 2014. We continue
to progress satisfactorily on reviewing the technical and economic
feasibility of a program for additional exploration to enable
re-opening after FY 2016. Drilling at D-Panel and other areas is
currently underway.
EBITDA is higher than Q2 FY2014 by Rs. 45
crore due to improved volumes, better Tc/Rcs and healthier
by product credits. Sequentially the impact of lower volumes and
onetime expenses due to the 23 day planned maintenance at Tuticorin
plant in Q1 shows up in comparison to the current quarter. During
Q2, Tc/Rc, acid prices and premiums were strong.
Outlook
The Tuticorin smelter is expected to produce at over 90%
capacity utilization going forward.
Aluminium
Q2 Q1 H1
%
Particulars (in'000 % change change
tonnes, or as stated) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
Alumina - Lanjigarh 226 116 96% 233 460 116 -
Total Aluminum
Production 222 200 11% 203 424 395 7%
Jharsuguda-I 138 137 1% 132 270 271 -
245kt Korba-I 65 63 3% 60 125 124 1%
325kt Korba- II 1 19 - - 11 29 - -
Financials (In Rs.
crore, except as stated)
Revenue 3,459 2,799 24% 2,917 6,376 5,162 24%
EBITDA - BALCO 57 93 (39)% 89 146 117 25%
EBITDA - Vedanta
Aluminium Division 524 375 40% 441 967 635 52%
Alumina CoP - Lanjigarh
($/MT) 366 329 11% 365 366 329 11%
Alumina CoP - Lanjigarh
(Rs./MT) 22,200 20,500 8% 21,800 22000 20,500 8%
Aluminium CoP -(Rs./MT) 1,12,300 1,02,900 9% 1,02,000 1,06,900 1,00,600 6%
Aluminium CoP -($/MT) 1,853 1,651 12% 1,699 1,776 1,702 4%
Aluminium CoP-
Jharsuguda (Rs/MT) 1,05,500 99,700 6% 97,800 1,01,600 96,800 5%
Aluminium CoP -
Jharsuguda($/MT) 1,740 1,602 9% 1,636 1,688 1,637 3%
Aluminum CoP - BALCO
(Rs/MT) 1,26,500 1,09,800 15% 1,09,600 1,18,200 1,09,000 8%
Aluminium CoP - BALCO
($/MT) 2,089 1,755 19% 1,834 1,964 1,844 6%
Aluminum LME Price
($/MT) 1,987 1,781 12% 1,798 1,896 1,807 5%
- Trial run production of 13 kt in Q2 FY2015 and 11kt in Q1
FY2015 from Korba II 325 kt smelter
The Lanjigarh alumina refinery continues to operate at above 90%
of its rated capacity and produced 226,000 tonnes in Q2. The
numbers for the corresponding prior period are not comparable as
the plant restarted in July last year and ramped up thereafter. CoP
at Lanjigarh is impacted by the mix of bauxite, with increased
reliance on imported bauxite reflecting in higher CoP compared to
H1 FY2014.
In Q2, production at the 500kt Jharsuguda-I & 245kt Korba-I
smelters remained stable and above rated capacities despite
incidences of grid failures. The continued challenges of coal
availability in the country due to lower volumes of e-auction coal,
rail logistics constraints and increased reliance on imports
continue to adversely impact costs. Due to low coal
availability, we also resorted to some temporary power purchases at
Korba-I during the quarter. Availability of domestic coal is
expected to be higher in the next two quarters, as compared to Q2.
However, the environment for coal availability is expected to
continue to be challenging.
The 84 pots at the 325kt Korba-II smelter ramped up and were
capitalized from beginning of September. During the quarter, it
produced 19,000 tonnes, of which 13,000 tonnes were under trial
runs. We will further ramp up the smelter to full capacity
subsequent to the commissioning of the 1,200 MW power plant, for
which we are awaiting the final regulatory approvals.
Hot Metal cost at Jharsuguda I was 6% higher at Rs. 105,500 per
tonnes (US$1,740) as compared to Rs.
99,700 (US$1,602) per tonne last year
primarily on account of higher alumina and coal costs.
Hot Metal cost at Korba I was up 15% at Rs. 126,500 per tonne
(US$2,089) compared to Rs. 109,800
per tonne (US$1,755) earlier,
primarily on account of further tapering of linkage coal and higher
alumina costs.
EBITDA for the quarter was higher at Rs. 581 crore yoy as well as sequentially, mainly due
to higher LME prices (up 12%) and premiums of ~$475 per tonne (ingot ~$383). BALCO's profitability was impacted by the
higher coal costs and temporary power purchases as mentioned
above.
We have also commenced the start up of the first phase of 50
pots of the 1.25 mtpa Jharsuguda II pot-lines, using surplus power
from the 1,215 MW power plant.
In September 2014, the Supreme
Court of India passed a judgment
cancelling 214 coal block allocations since 1993, which included
our coal block at BALCO. This block was at advanced stages of
approvals but had not commenced mining. The company awaits further
government action to deal with this matter. Rs. 45 crore expenditure towards the coal block has
been written offand is reflected under "exceptional items".
Projects:
Lanjigarh Refinery Expansion Project (1mtpa to 6mtpa): The
Public Hearing was successfully conducted at Lanjigarh in
July 2014. The Ministry of
Environment and Forest's Expert Advisory Committee meeting has been
conducted during the quarter. The Environmental Clearance is
expected in H2 FY2015, following which expansion will be undertaken
in a phased manner.
Laterite Mines: The Government of Odisha has granted Prospecting
Licenses (PLs) for three Laterite deposits. We will apply for
Mining Lease (ML) and take Environmental Clearance following
exploration.
Outlook
Production at Korba-II will ramp up beyond 84 pots consequent to
the commencement of the 1200MW power plant and regularization of
coal supply chain. The Jharsuguda-II smelter will ramp up to 50
pots with existing captive power. The 500kt Jharsuguda-I &
245kt Korba-I smelter will produce at existing capacity.
Coal: We are taking a number of steps to meet our coal
requirements. We have replaced a large part of our purchases of
e-auction coal with imported coal, where global seaborne prices
have reduced substantially. We have increased our proportion of
imported coal from less than 10% to 25-35%. We are concurrently
pursuing with the government to get our coal linkage restored in
view of deallocation of our coal block.
Power
Q2 Q1 H1
% %
Particulars (in million change change
units) FY2015 FY2014 YoY FY2015 FY2015 FY2014 YoY
Total Power Sales 2,028 1,910 6% 2,599 4,627 5,087 (9%)
Jharsuguda 2400 MW 1,653 1,494 11% 2,154 3,807 4,098 (7%)
MALCO 204 221 (8%) 229 433 445 (3%)
HZL Wind Power 170 151 13% 146 316 313 1%
BALCO 270MW Power 1 44 (98%) 70 71 231 (69%)
Financials (in Rs. crore
except as stated)
Revenue 789 793 (1%) 872 1,661 2,066 (20%)
EBITDA 259 286 (9%) 338 597 727 (18%)
Average Cost of
Generation(Rs./unit) 2.27 2.35 (3%) 1.92 2.09 2.30 (9%)
Average Realization
(Rs./unit) 3.53 3.77 (6%) 3.21 3.35 3.69 (9%)
Jharsuguda Cost of Generation
(Rs./unit) 2.28 2.32 (2%) 1.75 1.98 2.25 (12%)
Jharsuguda Average
Realization (Rs./unit) 3.24 3.47 (7%) 2.90 3.05 3.46 (12%)
The Jharsuguda 2,400MW power plant operated at a PLF of 38% in
Q2, which was higher than Q2 FY2014 but lower than Q1 FY2015,
largely due to operational issues with one of the four 600MW units,
which has now been rectified. Power from the BALCO 270MW power
plant was primarily used to ramp up 84 pots of the 325kt Korba-II
smelter. MALCO operated at 85% PLF - lower than Q1 due to lower off
take by Tamil Nadu Electricity Board given the higher seasonal
availability of wind power in the state.
The first 660MW unit of the Talwandi Sabo power plant is
currently under commissioning and its reliability run is expected
to take place in Q3. During the quarter, unprecedented rainfall
resulted in breach of an irrigation canal nearby and flooding of
the plant premises, and we are implementing a durable solution to
mitigate future incidences.
EBITDA in Q2 was 9% lower at Rs. 259
crore primarily due to lower realisation from the open
access sales. Sequentially, EBITDA was lower due to one-time gain
in Q1 of Rs 63 crore and higher coal
costs, partially offset by the positive effect of better
realisations from sales on the exchange.
Ports Business
In Q2 the company achieved 1.7 mn tonnes volume at the Vizag
port as compared to 0.9 mn tonnes a year ago. EBITDA from the port
business was Rs.14 crore. Compared to
Q2 FY2014 it was higher by Rs.11
crore reflecting the increased volumes, but softening rates
reflecting higher competition. The volumes continue to be impacted
by shortage of railway rakes. After the effect of hurricane
'Hudhud', the operations are normalising, while critical equipment
is undamaged.
Corporate
The Equity Share Buyback program of Cairn India commenced on
23 January 2014 and closed on
22 July 2014. Cairn India bought back 1.92% of its share capital
during the period for a total consideration of Rs. 1,225.45 crores.
Update on Asarco
The company received the necessary approval from Reserve Bank
of India for remittance of US$82.75 million to
Asarco LLC in order to satisfy the Judgment of the US Bankruptcy
Court. Subsequently, pursuant to a settlement agreement
entered on Oct 17, 2014 between the parties, the Company
has paid the approved amount to Asarco LLC and the
parties have settled all their claims against each other in
this matter. Accordingly, all pending appeals have been
withdrawn by the parties, all enforcement actions have been
terminated by Asarco LLC and the Turnover Order has been vacated by
the US Bankruptcy Court. The Company had already recognized the
Judgment amount of US$82.75 million as expense in
FY2012.
With the aforesaid settlement, the matter pertaining to payment
of dividend to eligible ADR holders has been resolved.
Annexure
Debt and Cash
(in Rs. Crore)
Company 30 September 2014 30 June 2014
Debt Cash & LI Net Debt Debt Cash & LI Net Debt
Sesa Sterlite
Standalone 40,187 3,143 37,044 39,883 2,489 37,394
Zinc India - 25,412 (25,412) - 24,611 (24,611)
Zinc International - 1,169 (1,169) - 965 (965)
Cairn India - 16,164 (16,164) 351 19,381 (19,030)
BALCO 5,309 28 5,281 5,079 31 5,048
Talwandi Sabo 5,840 9 5,831 5,303 15 5,288
Cairn acquisition SPV
(1) 26,979 1,021 25,958 28,370 - 28,370
Others squared 1,211 161 1,050 1,042 172 870
Sesa Sterlite
Consolidated 79,526 47,107 32,419 80,028 47,664 32,364
- As on 30 September 2014, debt
at Cairn acquisition SPV comprises Rs.10,474 crore of
bank debt and Rs.16,505 crore of inter-company debt from
Vedanta Resources Plc. The accrued interest of Rs. 107 crore
on the inter-company debt as on 30 September
2014
- Others include MALCO Energy, CMT, VGCB, Sesa Resources,
Fujairah Gold, and Sesa Sterlite investment
companies.
Debt Maturity Profile
(in Rs. Crore)
FY 2019 &
Particulars (1) FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Later Total
Sesa Sterlite
Standalone 5,184 2,690 3,187 4,928 6,539 5,161 27,689
Sesa Sterlite
Subsidiaries 5,409 2,601 3,046 2,982 4,074 3,136 21,248
Total 10,593 5,291 6,233 7,911 10,612 8,297 48,937
¹Maturity profile excludes working capital facilities
of Rs.14,086
crore.
Debt numbers in the tables above are at book value
Note: Figures in previous
periods have been regrouped or restated, wherever necessary to make
them comparable to current period.
About Sesa Sterlite Limited
Sesa Sterlite Limited (SSLT) is one of the world's largest
diversified natural resources companies, whose business primarily
involves exploring and processing minerals and oil & gas. SSLT
produces oil & gas, zinc, lead, silver, copper, iron ore,
aluminium and commercial power and has a presence across
India, South Africa, Namibia, Ireland, Australia, Liberia and Sri
Lanka. Sustainability is at the core of SSLT's strategy,
with a strong focus on health, safety and environment and on
enhancing the lives of local communities.
SSLT is a subsidiary of Vedanta Resources Plc, a London-listed company. SSLT is listed on the
Bombay Stock Exchange and the National Stock Exchange in
India and has ADRs listed on the
New York Stock Exchange.
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.
For further information, please contact:
Communications
Roma Balwani
President - Group Communications, Sustainability & CSR
Tel: +91-22-6646-1000
gc@vedanta.co.in
Investor Relations
Ashwin Bajaj
Director - Investor Relations
Sheetal Khanduja
Associate General Manager - Investor Relations
Tel: +91-22-6646-1531
sesasterlite.ir@vedanta.co.in