Vedanta Res PLC VED Sterlite Industries announces Q2 FY2013 results

  Vedanta Res PLC (VED) - Sterlite Industries announces Q2 FY2013 results

RNS Number : 3224P
Vedanta Resources PLC
23 October 2012




                                                                             

                                                               23 October 2012

                            Vedanta Resources plc
 Sterlite Industries (India) Limited announces Unaudited Consolidated Results
        for the Second Quarter and Six Months Ended 30 September 2012

The following release was issued  today by Vedanta Resources Plc's  subsidiary 
Sterlite Industries (India) Limited.



                                                              23 October 2012

                     Sterlite Industries (India) Limited

          Unaudited Consolidated Results for the Second Quarter and

                      Six Months Ended 30 September 2012



Mumbai,  India:  Sterlite  Industries  (India)  Limited  ("Sterlite"  or   the 
"Company") today announced its  results for the Second  Quarter (Q2) and  Half 
Year (H1) ended 30 September 2012.



Q2 Highlights



Operations

n Strong integrated production of Silver and  Lead at Zinc India, up 63%  and 
40% respectively

n Power sales from 2,400 MW Power Plant at Jharsuguda, up 53%

n Consistent performance at Zinc International

n Aluminium Cost of Production maintained  in the 2nd quartile of the  global 
cost curve



Financials

n Basic EPS up 75% at Rs. 5.2 per share

n Strong balance sheet with cash and liquid investments of Rs. 23,334 crore



Corporate

n Interim dividend of Rs. 1.1 per share

n Sesa Sterlite merger expected to complete by end CY 2012

n Contribution of over Rs. 3,000 crore to Indian exchequer in taxes, duties
and royalties in H1

Consolidated Financial Performance



                                    Q2             Q1             H1
Particulars (In Rs.       FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
Crore, except as stated)                     YoY                           YoY
Net Sales/Income from     11,029 10,135       9% 10,591 21,620 19,961       8%
operations
EBITDA                     2,538  2,551        -  2,337  4,875  5,309      -8%
Interest expense             178    237     -25%    242    420    402       5%
Forex gain/(loss)            219  (246)        -  (217)      1  (189)        -
Profit before              3,416  2,724      25%  2,797  6,213  6,150       1%
Depreciation and Taxes
Depreciation                 522    446      17%    518  1,040    866      20%
Profit before Exceptional  2,894  2,278      27%  2,279  5,173  5,284      -2%
items
Exceptional Items              -     30        -      -      -     34        -
Taxes                        511    505       1%    334    845  1,119     -25%
Profit After Taxes         2,383  1,744      37%  1,945  4,328  4,131       5%
Minority Interest            579    503      15%    577  1,156  1,145       1%
Share in Profit/(Loss) of   (61)  (243)      75%  (167)  (227)  (349)      35%
Associate
Attributable PAT after     1,743    998      75%  1,202  2,944  2,638      12%
exceptional item
Basic Earnings per Share     5.2    3.0      75%    3.6    8.8    7.8      12%
(Rs./share)
Exchange rate (Rs./$) -     55.2   45.8      21%   54.2   54.7   45.3      21%
Average
Exchange rate (Rs./$) -     52.7   48.9       8%   56.3   52.7   48.9       8%
Closing



Strong production  and  sales  volumes  of silver  and  lead  at  Zinc  India, 
commercial power at Sterlite Energy Limited (SEL) and refined copper at Copper
India generated revenues of Rs. 11,029 crore in Q2, up 9% year-on-year and Rs.
21,620 crore in H1, up 8% year-on-year.  The fall in metal prices was  largely 
offset by the depreciation of the Indian Rupee.



Q2 EBITDA was in line with the corresponding prior quarter at Rs. 2,538 crores
and  marginally  lower  for  H1  at  Rs.  4,875  crore,  reflecting   improved 
operational efficiencies,  lower  metal  prices,  higher  metal  premiums  and 
significant depreciation of the Indian Rupee.



Interest costs  during  Q2  was lower  at  Rs.  178 crore  compared  with  the 
corresponding prior quarter primarily due to rupee appreciation in the quarter
which resulted into lower foreign exchange loss being transferred to  interest 
cost.



During Q2, the company recorded a foreign  exchange gain of Rs. 219 crore  due 
to appreciation of Indian  Rupee from Rs.  56.30 per US dollar  as on 30  June 
2012 to Rs. 52.70 per US dollar  as on 30 September 2012, which helped  offset 
the foreign exchange loss in Q1.



With the improved  performance and  lower foreign exchange  losses at  Vedanta 
Aluminium Limited (VAL), Sterlite's  share of Loss  of Associate decreased  to 
Rs. 61 crore in Q2 and Rs. 227 crore in H1 as compared with Rs. 243 crore  and 
Rs. 349 crore respectively, in the corresponding prior periods.



Depreciation cost during Q2 and H1 was  higher atRs. 522 crore and Rs.  1,040 
crore compared  with Rs.  446 crore  and  Rs. 866  crore respectively  in  the 
corresponding prior periods due to capitalization of new plants at Zinc  India 
and SEL.



Attributable PAT and Basic EPS were Rs. 1,743 crore and Rs. 5.2 per share  for 
Q2, up 75% and were Rs. 2,944 crore and Rs. 8.8 per share for H1, up 12%.



The company continued to maintain a strong balance sheet with cash and  liquid 
investment of
Rs. 23,334 crore as on 30 September 2012.



Merger of Sterlite and Sesa Goa Limited and Vedanta Group Consolidation



Further to  the approval  received  from the  Stock  Exchanges in  India,  the 
Competition Commission of  India, Foreign Investment  Promotion Board and  the 
equity shareholders during Q1, approval of the Supreme Court of Mauritius  for 
the merger of Ekaterina Limited with the Sesa Goa Limited was obtained  during 
Q2. The Schemes are now awaiting approval  from the High Court of Madras  and 
High Court of Bombay at Goa.



Dividend



The Board  has recommended  an interim  dividend  of Rs.  1.1 per  share.  The 
interim dividend outgo  will be Rs.  370 crore. The  record date for  dividend 
payment is 30 October 2012.

Zinc - India Business



                                    Q2             Q1             H1
Production (in'000        FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                     YoY                           YoY
 Mined metal content       190    210      -9%    187    377    398      -5%
 Refined Zinc - Total      163    185     -12%    161    324    378     -14%
 Refined Zinc -            153    185     -17%    157    310    376     -17%
Integrated
 Refined Zinc - Custom      10      -        -      4     14      2        -
 Refined Lead - Total       27     17      60%     31     58     33      75%
^1
 Refined Lead -             24     17      40%     29     53     33      59%
Integrated
 Refined Lead - Custom       3      -        -      2      5      -        -
 Silver - Total (in         92     49      86%     82    174     96      81%
tonnes) ^2
 Silver - Integrated        80     49      63%     79    160     96      66%
(in tonnes)
 Silver - Custom (in        12      -        -      3     14      -        -
tonnes)
Financials (In Rs. crore,
except as stated)
Revenue                    2,746  2,560       7%  2,641  5,387  5,344       1%
EBITDA                     1,408  1,424      -1%  1,349  2,757  2,978      -7%
PAT                        1,497  1,330      13%  1,542  3,039  2,809       8%
Zinc CoP without Royalty  46,750 38,800      20% 45,800 46,300 39,000      19%
(Rs./MT)
Zinc CoP without Royalty     844    847       0%    844    845    861      -2%
($/MT)
Zinc CoP with Royalty        999  1,036      -4%  1,007  1,005  1,050      -4%
($/MT)
Zinc LME Price ($/MT)      1,885  2,224     -15%  1,928  1,906  2,236     -15%
Lead LME Price ($/MT)      1,975  2,459     -20%  1,974  1,974  2,503     -21%
Silver LBMA Price ($/oz)      30     39     -23%     28     30     38     -23%

1. Includes captive  consumption of 3,076  tonnes in H1  FY2013 vs.  2,739 
tonnes in H1 FY 2012, and 1,435 tonnes in Q2 FY2013 vs. 1,348

 tonnes in Q2 FY2012.

2. Includes captive consumption of 16 tonnes in H1 FY2013 vs. 14 tonnes in
H1 FY 2012 and 8 tonnes in Q2 FY2013 vs. 7 tonnes in

 Q2 FY2012.



Mined metal  production was  190,000 tonnes  in Q2  and 377,000  tonnes in  H1 
compared with 210,000  tonnes and  398,000 tonnes in  the corresponding  prior 
periods. The Sindesar  Khurd (SK) mine  continued to ramp-up  well with  mined 
metal production up 39% at 45,000 tonnes in H1.



In line with the mined metal production, integrated production of refined zinc
was 153,000 tonnes in  Q2 and 310,000 tonnes  in H1. Integrated production  of 
refined lead was 24,000 tonnes in Q2, and 53,000 tonnes in H1, up 40% and  59% 
respectively and the integrated production of  silver was 80 tonnes in Q2  and 
160 tonnes in H1,  up 63% and  66% respectively, driven by  the ramp-up of  SK 
mine and the new 100kt Dariba lead smelter.



In line with the mine plan and earlier guidance, production in H2 should  more 
than make up the shortfall in H1 production. The H2 production is expected  to 
progressively increase during Q3 and Q4. We expect the mined metal  production 
for the full year to be slightly higher than the previous year.



EBITDA for Q2 was in line with the corresponding prior quarter. During Q2, the
positive impact  of  higher lead-silver  volumes  and Rupee  depreciation  was 
offset by lower  zinc volumes,  lower metal prices  and higher  COP (in  Rupee 
terms). PAT for  Q2 was higher,  despite stable EBITDA,  on account of  higher 
investment income.

                                      

The Rampura Agucha underground  mine and Kayar  mine projects are  progressing 
well to  deliver commercial  production  in FY2014.  The Kayar  mine  produced 
developmental ore in Q2.



Zinc - International Business

                                    Q2             Q1             H1
Production (in'000        FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                        YoY                           YoY
Refined Zinc - Skorpion       37     37        -     36     73     76      -4%
Mined metal content- BMM      77     77        -     70    147    157      -6%
and Lisheen
Total                        114    114        -    106    220    233      -5%
Financials (In Rs.
Crore, except as stated)
Revenue^1                  1,125  1,160      -3%  1,012  2,136  2,221      -4%
EBITDA                       392    475     -17%    337    730    992     -26%
PAT                          210    342     -39%    190    400    659     -39%
CoP - ($/MT)               1,053  1,242     -15%  1,111  1,087  1,164      -7%
Zinc LME Price ($/MT)      1,885  2,224     -15%  1,928  1,906  2,236     -15%
Lead LME Price ($/MT)      1,975  2,459     -20%  1,974  1,974  2,503     -21%

1. Includes intercompany sales to Zinc India of Rs. 119 crore in  Q2FY2012 
and Rs. 151 crore in H1FY2012



Total production  of refined  zinc and  mined zinc-lead  metal in  concentrate 
(MIC) was 114,000 tonnes in Q2,  in line with the corresponding prior  period, 
and 5% lower at 220,000 in H1, in  line with the current year's mine plan  and 
on account of lower grades, in line with earlier guidance.



EBITDA for  Q2  was  lower  compared with  the  corresponding  prior  periods, 
primarily on account of lower LME  prices for Zinc and Lead, partially  offset 
by lower COP.

Copper - India / Australia Business



                                    Q2             Q1             H1
Production (in'000        FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
tonnes, or as stated)                        YoY                           YoY
Copper - Mined metal           6      5      14%      7     13     11      13%
content
Copper - Cathodes            87     87        -     88    175    161       9%
Financials (In Rs. crore,
except as stated)
Revenue                    5,417  5,307       2%  5,301 10,718  9,939       8%
EBITDA                       342    439     -22%    265    608    770     -21%
Foreign Exchange             161  (104)        -  (219)   (58)  (106)        -
gain/(loss)
PAT                          475    294      62%     96    570    687     -17%
Net CoP - cathode            7.1  (3.7)        -    5.4    6.3  (3.3)        -
(US¢/lb)
Tc/Rc (US¢/lb)              11.3   13.0     -13%   12.4   11.8   13.4     -12%
Copper LME Price ($/MT)    7,706  8,982     -14%  7,869  7,785  9,057     -14%



Copper cathode production  was 87,000 tonnes  in Q2 and  9% higher at  175,000 
tonnes in H1 on account of  higher copper recovery. Mined metal production  at 
Australia was 14% higher at 6,000 tonnes in Q2 and 13% higher at 13,000 tonnes
in H1.



EBITDA for Q2 and H1  was lower on account of  lower Tc/Rc and higher net  COP 
which were partially offset by improved production volumes. Net COP was higher
on account of lower sulphuric acid realisation and higher power costs.



The first  80MW  unit  of the  160MW  captive  power plant  at  Tuticorin  was 
synchronised at the end  of Q2 and  is currently under  trial runs. This  unit 
will supply power to the copper smelter, which is expected to reduce the gross
COP significantly and further enhance cost competitiveness of the smelter.

Aluminium Business - BALCO



                                 Q2              Q1              H1
Production (in'000      FY2013 FY2012 % change  FY2013  FY2013 FY2012 % change
tonnes, or as stated)                      YoY                             YoY
Aluminium                   63     60       4%      60     123    121       1%
Financials (In Rs.
crore, except as
stated)
Revenue                    859    686      25%     780   1,640  1,442      14%
EBITDA                      95     78      22%      57     153    269     -43%
PAT                         32   (17)        -     (7)      26    128     -80%
CoP ($/MT)               1,970  2,133      -8%   1,910   1,940  2,036      -5%
CoP (Rs./MT)           108,800 99,300      10% 103,500 106,200 93,900      13%
Aluminum LME Price       1,918  2,399     -20%   1,978   1,947  2,495     -22%
($/MT)



The Korba-II smelter operated at its  rated capacity and continues to  convert 
all of its primary metal into value added products.



EBITDA during Q2 was higher, compared with the corresponding prior quarter, on
account of higher metal premiums and  depreciation of Indian Rupee which  more 
than offset the impact of  higher COP in rupee  terms and lower aluminium  LME 
prices.



Q2 aluminium COP in Rupee  terms was higher on  account of higher coal  prices 
due to tapering of coal linkage, higher rail freight and carbon cost.



Aluminium premiums  have  risen  substantially year  on  year  reflecting  the 
demand/supply gap of primary metal in  the physical market. Premiums over  LME 
price on aluminium ingots went up by about $150/tonne during Q2 as compared to
the previous year.



Due to a delay in obtaining regulatory approvals, the first 300MW unit of  the 
BALCO 1,200MW captive power  plant is now expected  to be synchronized in  the 
current quarter,  subject to  receiving regulatory  approvals. Thereafter,  we 
plan to tap the first metal at the 325 ktpa Korba-III aluminium smelter in  Q4 
FY2013. For the  211mt coal block  at BALCO, we  are progressing well  towards 
obtaining the  second stage  forest  clearance, and  thereafter we  intend  to 
commence mining this year.

Aluminium Business - Vedanta Aluminium Limited (Associate Company)



                                Q2              Q1               H1
Production (in'000                   % change                         % change
tonnes, or as         FY2013  FY2012      YoY  FY2013  FY2013  FY2012      YoY
stated)
Alumina - Lanjigarh     205     228     -10%     218     423     451      -6%
Aluminum -              134      91      47%     124     259     203      27%
Jharsuguda
Financials (in Rs.
crore except as
stated)
Revenue                1,819   1,198      52%   1,681   3,500    2696      30%
EBITDA                   225       3        -     263     488     216     126%
Forex gain/(loss)        280   (209)        -   (116)     164   (187)        -
PAT                    (206)   (823)     -75%   (565)   (771)  (1183)     -35%
SIIL Share (29.5%)      (61)   (243)     -75%   (167)   (227)   (349)     -35%
Aluminium COP ($/MT)   1,905   2,554     -25%   1,845   1,874   2,427     -23%
Aluminium COP        105,300 117,000     -10% 100,000 102,600 109,800      -7%
(Rs./MT)
Aluminium LME Price    1,918   2,399     -20%   1,978   1,947   2,495     -22%
($/MT)



Alumina production at  the Lanjigarh  refinery was  205,000 tonnes  in Q2  and 
423,000 tonnes in H1,

10% and 6% lower than the corresponding  prior periods due to lower supply  of 
third-party bauxite.



The Jharsuguda-I smelter operated above  its rated capacity, with  significant 
improvement in  specific power  consumption. Aluminium  production in  Q2  was 
134,000 tonnes, 47% higher year-on-year. H1 Aluminium production was also  27% 
higher at 259,000 tonnes.



Q2 aluminium COP in  Rupee terms was lower  due to higher production,  reduced 
coal costs and better operational efficiencies.



Q2 EBITDA  was significantly  higher, compared  with the  corresponding  prior 
quarter, on account of higher  production, better cost performance and  higher 
metal premiums.EBITDA margin at VAL also improved due to higher conversion of
primary metal into value added products, which increased by 35% in Q2 compared
with the corresponding prior period.



PAT during the quarter improved due to increase in EBITDA by Rs. 222 crore and
mark to market gain on foreign exchange of Rs. 280 crore as compared to a loss
of Rs. 209 crore in the corresponding prior period.



Status of Investment in Vedanta Aluminium Limited as at 30 September 2012



Investment in VAL (Rs. Crore) Sterlite Vedanta External Total
Equity                             563   1,391        -  1,954
Preference Shares                3,000       -        -  3,000
Quasi Equity / Debt              7,129   2,289   18,470 27,887
Total Funding                   10,692   3,680   18,470 32,841
Corporate Guarantees             4,538  23,121        - 27,659

Power Business



                                    Q2             Q1             H1
Particulars (in million   FY2013 FY2012 % change FY2013 FY2013 FY2012 % change
units)                                  YoY                           YoY
Total Power Sales          2,474  1,748      42%  2,458  4,933  3,415      44%
SEL ^1                     1,940  1,267      53%  1,938  3,879  2,404      61%
Balco 270MW Power Sales      346    387     -10%    338    684    811     -16%
HZL Wind Power               188     94      99%    182    370    200      85%
Financials (in Rs. crore
except as stated)
Revenue ^2                   885    601      47%    857  1,746  1,202      45%
EBITDA                       300    134     124%    329    630    300     110%
PAT                          113     23     391%     83    196     73     169%
Average Power COP           2.22   2.59     -14%   2.02   2.12   2.53     -16%
(Rs./unit)
Average Power Realization   3.45   3.37       2%   3.44   3.44   3.48      -1%
(Rs./unit)
SEL COP (Rs./unit)          2.31   2.88     -20%   2.14   2.23   2.87     -22%
SEL realization             3.42   3.40       1%   3.51   3.47   3.53      -2%
(Rs./unit)

1. Includes production under trial run  of 339 million units in H1  FY2013 
vs. 288 million units in H1 FY2012, and 138 million units in

 Q2 FY2013 vs. 149 million units in Q2 FY2013.

2. Includes intercompany sale of Rs. 4 crore in H1 FY2013



Power sales were  2,474 million units  in Q2  and 4,933 million  units in  H1, 
42%and 44% higher  than the  corresponding prior  periods, respectively.  This 
significant increase was primarily due to higher power sales from three  units 
of the Jharsuguda 2,400MW power plant,  operating at availability of over  80% 
and plant load  factor (PLF) of  50% in  H1, with the  fourth unit  generating 
under trial run. The PLF of the Jharsuguda 2,400MW power plant was constrained
due to  a temporary  evacuation  limitations imposed  following a  power  grid 
failure in end August 2012.



Power sales  were augmented  by higher  sales  at HZL  wind power,  which  was 
expanded by 150MW to 274MW last year.



Power sales at Balco 270 MW were 10% lower at 346 million units in Q2 and  16% 
lower at 684 million units in H1 due to lower demand in the spot market.



EBITDA for Q2 was higher due to higher volumes at SEL and wind power and lower
generation costs. During  Q2, generation  cost at  SEL reduced  on account  of 
lower coal costs and efficient plant operations.



We continue to  augment our power  evacuation capacity at  SEL, and target  to 
enhance the same by an additional 1,000MW transmission by Q4 FY2013.



Work at the Talwandi Sabo power project is progressing well and the first unit
is now expected to be synchronized in Q2 FY2014.

Cash, Cash Equivalents and Liquid Investment



The company continues to follow  a conservative investment policy and  invests 
in high quality debt instruments in the form of mutual funds, bonds and  fixed 
deposits with  banks. As  at 30  September 2012,  the company  has cash,  cash 
equivalents and  liquid investments  of Rs.  23,334 crore,  out of  which  Rs. 
12,977 crore was invested in debt mutual funds and bonds, and Rs. 10,357 crore
was in fixed deposits and bank balances.



Note: Figures in previous  periods have been  regrouped or restated,  wherever 
necessary to make them comparable to current period.







For further information, please contact:

Investors                                  ir@vedanta.co.in

Ashwin Bajaj                               Tel: +91 22 6646 1531

Senior Vice President - Investor Relations 

Vedanta Resources plc


Media                                      Tel: +44 20 7251 3801

Gordon Simpson

  Finsbury





About Vedanta Resources plc

Vedanta Resources  plc ("Vedanta")  is a  London listed  FTSE 100  diversified 
global natural resources  major. The group  produces aluminium, copper,  zinc, 
lead, silver,  iron  ore,  oil  &  gas  and  commercial  energy.  Vedanta  has 
operations  in  India,  Zambia,  Namibia,  South  Africa,  Ireland,   Liberia, 
Australia and  Sri Lanka.  With  an empowered  talent pool  globally,  Vedanta 
places strong emphasis on  partnering with all its  stakeholders based on  the 
core values of entrepreneurship, excellence, trust, inclusiveness and  growth. 
For more information, please visit www.vedantaresources.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.





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR BKNDBKBDDCKB -0- Oct/23/2012 10:32 GMT