Sterlite Industries (India) Limited Unaudited Consolidated Results for the Third Quarter and Nine Months Ended 31 December 2012

  Sterlite Industries (India) Limited Unaudited Consolidated Results for the
  Third Quarter and Nine Months Ended 31 December 2012

Business Wire

MUMBAI, India -- January 29, 2013

Sterlite Industries (India) Limited (“Sterlite” or the “Company”) today
announced its results for the Third Quarter (Q3) and Nine Months ended 31
December 2012.

Q3 Highlights

Financials

  *Attributable PAT and Earnings per share up 30% at Rs. 1,191 Crore and Rs.
    3.5 per share, respectively
  *Strong balance sheet with cash and liquid investments of Rs. 23,472 crore

Operations

  *Mined metal production up 11% and integrated silver production up 8% at
    Zinc India
  *Next phase of mining growth to 1.2 mtpa of zinc-lead capacity announced at
    Zinc India
  *Strong operational performance at Aluminium smelters, producing above
    rated capacity
  *Vizag Coal Berth obtained provisional Commercial Operations Declaration
    (COD) and expected to commence operations in the current quarter

Mr. Anil Agarwal, Chairman, Sterlite Industries (India) Ltd. : “Sterlite
Industries continues to maintain its strong performance and leadership
position. We have substantially improved our efficiencies, operational
performance and metal production across businesses. Zinc India is poised for
the next phase of growth as we embark on a major exploration drive using best
in class technology and global expertise.”


Consolidated Financial Performance

                  Q3                            Q2        Nine months period
Particulars (In                           %                                         %
Rs. Crore, except  FY2013    FY2012    change  FY2013    FY2013    FY2012    change
as stated)                                YoY                                       YoY
Net Sales/Income   10,692   10,249   4   %   11,029   32,313   30,210   7   %
from operations
EBITDA             2,375    2,363    1   %   2,538    7,252    7,672    (5  %)
Interest expense   227      200      -      178      646      602      -   
Forex (loss)/gain  (63    )  (300   )  -      219      (61    )  (489   )  -   
Profit before
Depreciation and   2,896    2,616    11  %   3,416    9,110    8,766    4   %
Taxes
Depreciation       538      461      -      522      1,578    1,327    -   
Profit before      2,358    2,155    -      2,894    7,531    7,439    -   
Exceptional items
Exceptional Items  -        6        -      -        -        41       -   
Taxes              356      505      -      511      1,200    1,624    -   
Profit After       2,003    1,643    22  %   2,383    6,331    5,775    10  %
Taxes
Minority Interest  585      466      -      579      1,742    1,611    -   
Share in
Profit/(Loss) of   (226   )  (264   )  -      (61    )  (453   )  (612   )  -   
Associate
Attributable PAT
after exceptional  1,191    914      30  %   1,743    4,136    3,551    16  %
item
Basic Earnings
per Share          3.5      2.7      -      5.2      12.3     10.6     -   
(Rs./share)
Underlying
Earnings per       3.7      3.6      -      4.7      12.4     12.1     -   
Share*(Rs./share)
Exchange rate      54.1     51.0     -      55.2     54.5     47.2     -   
(Rs./$) – Average
Exchange rate      54.8     53.3     -      52.7     54.8     53.3     -   
(Rs./$) – Closing

*Before forex and exceptional items

Q3 EBITDA was in line with the corresponding prior quarter at Rs. 2,375 crore,
reflecting improved operational efficiencies, marginally higher metal prices
and premiums and improved sales realization due to INR depreciation, which
were partially offset by lower by-product realizations. Q3 FY2013 EBITDA was
lower compared to Q2 FY2013, impacted by lower power sales and lower
by-product credits.

Improved operational performance and lower foreign exchange losses at Vedanta
Aluminium Limited decreased Sterlite’s share of loss of associate by 14%
during Q3 compared with the corresponding prior quarter.

Depreciation cost during Q3 was higher compared with the corresponding prior
quarter on account of capitalization of new plants at Zinc India and Sterlite
Energy Limited.

Interest cost in Q3 FY2013 was higher as compared to the corresponding prior
quarter and Q2 FY2013 due to capitalisation of new plants and increased
borrowings.

Attributable PAT and Basic EPS were Rs. 1,191 crore and Rs. 3.5 per share for
Q3, up 30% and were Rs. 4,136 crore and Rs. 12.3 per share for the nine months
period, up 16%.

The company continued to maintain a strong balance sheet with cash and liquid
investment of Rs. 23,472 crore as on 31 December 2012.

Merger of Sterlite and Sesa Goa Limited and Vedanta Group Consolidation

The transaction has received approvals of respective companies’ equity
shareholders, the Stock Exchanges in India and the Competition Commission of
India. Approvals of Foreign Investment Promotion Board and the Supreme Court
of Mauritius have been received for the merger of Ekaterina Limited with Sesa
Goa Limited. The hearings at the High Court of Madras have been completed and
the order is awaited. The hearings at the High Court of Bombay at Goa are in
progress.


Zinc - India Business

             Q3                          Q2      Nine months period
Production                                                             %
(in ’000      FY2013  FY2012  % change  FY2013  FY2013  FY2012  change
tonnes, or                       YoY                                   YoY
as stated)
Mined metal   233     209     11   %    190     610     607     -    
content
Refined Zinc  171     191     (10  %)   163     495     569     (13  %)
– Total
Refined Zinc  168     188     (10  %)   153     479     563     (15  %)
– Integrated
Refined Zinc  3       3       -        10      17      6       -    
– Custom
Refined Lead  32      29      11   %    27      90      62      45   %
- Total ^1
Refined Lead  22      25      (11  %)   24      75      58      29   %
– Integrated
Refined Lead  10      4       -        3       15      4       -    
– Custom
Silver -
Total (in     117     58      103  %    92      290     154     89   %
tonnes) ^2
Silver -
Integrated    62      58      8    %    80      222     154     44   %
(in tonnes)
Silver –
Custom (in    55      -       -        12      68      -       -    
tonnes)
                                                         
Financials
(In Rs.
crore,                                                    
except as
stated)
Revenue       3,117   2,726   14   %    2,746   8,504   8,070   5    %
EBITDA        1,484   1,380   8    %    1,408   4,241   4,359   (3   %)
PAT           1,629   1,278   27   %    1,497   4,668   4,087   14   %
Zinc CoP
without       44,900  40,300  11   %    46,750  45,700  39,400  16   %
Royalty
(Rs./MT)
Zinc CoP
without       829     785     6    %    844     838     836     -    
Royalty
($/MT)
Zinc CoP
with Royalty  993     944     5    %    999     999     1,015   (2   %)
($/MT)
Zinc LME      1,947   1,897   3    %    1,885   1,920   2,123   (10  %)
Price ($/MT)
Lead LME      2,199   1,983   11   %    1,975   2,051   2,328   (12  %)
Price ($/MT)
Silver LBMA   33      32      3    %    30      31      36      (15  %)
Price ($/oz)
                                                               

           Includes captive consumption of 1,647 tonnes in Q3 FY2013 vs. 1,730
   1.  tonnes in Q3 FY2012, and 4,723 tonnes in nine months period FY2013
           vs. 4,469 tonnes in nine months period FY2012.
           Includes captive consumption of 8 tonnes in Q3 FY2013 vs. 9 tonnes
      2.   in Q3 FY2012, and 25 tonnes in nine months period FY2013 vs. 24
           tonnes in nine months period FY2012.
           

Mined metal production was 11% higher in Q3, as compared with the
corresponding prior quarter. Compared to Q2 FY2013 mined metal production was
22% higher in Q3. As guided previously, we expect higher mined metal
production during the full year FY2013 as compared with the previous year.

In line with the mine-plan, mined metal production was lower in first half of
FY2013 resulting in a lower integrated zinc production in Q3 as compared with
the corresponding prior quarter. However, compared to Q2 FY2013, integrated
zinc production was 10% higher in Q3, and is expected to increase further in
Q4 FY2013.

Integrated lead production was 11% lower in Q3 FY2013. However, total refined
lead production was 11% higher.

Integrated silver production was 8% higher in Q3 driven by production ramp-up
at SK mine and improved utilisation of lead-silver refining capacities.

EBITDA for Q3 was 8% higher due to higher refined lead and silver volumes,
higher metal prices and depreciation of the Indian Rupee, partially offset by
lower refined zinc volumes and higher CoP. CoP was higher on account of lower
by-product credits and lower volumes, partially offset by operational
efficiencies and lower coal prices.

PAT for Q3 was 27% higher compared with the corresponding prior period
primarily on account of higher investment income.

The Board of Directors of Hindustan Zinc has approved the next phase of
growth. Zinc India has been actively conducting exploration, which increased
net Reserve and Resource across all mines to 332.3 mt of ore as at end FY
2012. Based on a long-term evaluation of assets and in consultation with
mining experts, Zinc India has finalised plans for the next phase of growth,
which will involve sinking of underground shafts and developing underground
mines. The plan comprises developing a 3.75 mtpa underground mine at Rampura
Agucha and expanding the Sindesar Khurd mine from 2.0 mtpa to 3.75 mtpa, Zawar
mines from 1.2 mtpa to 5.0 mtpa, Rajpura Dariba mine from 0.6 mtpa to 1.2 mtpa
and Kayad mine from 0.35 mtpa to 1.0 mtpa. It will also involve the opening up
of a small new mine at Bamnia Kalan in the Rajpura Dariba belt.

The growth plan will increase mined metal production capacity to 1.2 mtpa
Metal in Concentrate (MIC). These mines will be developed using the
best-in-class technology and equipment, and in consultation with leading
global mine experts, ensuring highest level of productivity. The projects will
be completed in six years and the benefit of growth projects will start
flowing in from the third year, even as projects will continue till FY2019.
Annual capital expenditures for these projects will average US$250 million a
year over next six years (totalling approximately Rs. 8,000 Crores).


Zinc - International Business

             Q3                          Q2      Nine months period
Production                                                             %
(in’000       FY2013  FY2012  % change  FY2013  FY2013  FY2012  change
tonnes, or                       YoY                                   YoY
as stated)
Refined Zinc  36      34      7    %    37      109     109     -    
– Skorpion
Mined metal
content- BMM  68      71      (4   %)   77      215     228     (6   %)
and Lisheen
Total         104     105     -        114     324     337     (4   %)
Financials
(In Rs.
Crore,                                                    
except as
stated)
Revenue^1     1,065   1,030   3    %    1,125   3,201   3,251   (2   %)
EBITDA        439     373     18   %    392     1,169   1,365   (14  %)
PAT           226     235     (4   %)   210     627     844     (26  %)
CoP – ($/MT)  1,095   1,188   (8   %)   1,053   1,091   1,237   (12  %)
Zinc LME      1,947   1,897   3    %    1,885   1,920   2,123   (10  %)
Price ($/MT)
Lead LME      2,199   1,983   11   %    1,975   2,051   2,328   (12  %)
Price ($/MT)

   1.  Includes intercompany sales to Zinc India of Rs. 153 crore in nine
           months period FY 2012.
           

Zinc International delivered a total production of refined zinc and mined
zinc-lead metal MIC of 104,000 tonnes in Q3.

EBITDA for Q3 was 18% higher compared with the corresponding prior quarter
mainly due to higher zinc and lead LME prices and lower CoP.


Copper – India / Australia Business

            Q3                          Q2      Nine Months period
Production                        %                                       %
(in’000      FY2013   FY2012   change  FY2013  FY2013    FY2012    change
tonnes, or                        YoY                                     YoY
as stated)
Copper -
Mined metal  6       6       8   %   6       19       17       11  %
content
Copper -     92      84      9   %   87      267      245      9   %
Cathodes
                                                            
Financials
(In Rs.
crore,                                                       
except as
stated)
Revenue      5,164   5,130   1   %   5,417   15,882   15,068   5   %
EBITDA       234     426     (45 %)  342     842      1,196    (30 %)
Foreign
Exchange     (92   )  (122  )  25  %   161     (151   )  (234   )  35  %
gain/(loss)
PAT          147     347     (58 %)  475     718      1,033    (31 %)
Tc/Rc        12.4    15.9    (22 %)  11.3    12.0     14.3     (16 %)
(US¢/lb)
Net CoP –
cathode      10.8    2.4     -      7.1     7.8      (1.4   )  -   
(US¢/lb)
Copper LME
Price        7,909   7,489   6   %   7,706   7,827    8,531    (8  %)
($/MT)
                                                                  

Copper cathode production was 92,000 tonnes in Q3, 9% higher than the
corresponding prior period. Mined metal production at Australia was at 6,000
tonnes in Q3, in-line with the corresponding prior period.

EBITDA for Q3 was 45% lower compared with the corresponding prior quarter on
account of lower sulphuric acid realisations, lower contribution from
phosphoric acid operations and lower Tc/Rc, partially offset by increase in
volumes. Demand for phosphoric acid and sulphuric acid remains low and we
anticipate lower acid realisations in the current quarter as well.

The first 80MW unit of the 160MW captive power plant at Tuticorin was
commissioned in Q3 and is currently operating at 80% PLF. The second 80MW unit
is expected to be synchronized in Q1 FY2014.


Aluminium Business - BALCO

           Q3                             Q2       Nine months period
Production                          %                                     %
(in’000     FY2013     FY2012    change  FY2013   FY2013   FY2012  change
tonnes, or                          YoY                                   YoY
as stated)
Aluminium   62        63       -      63       185      184     1   %
                                                            
Financials
(In Rs.
crore,                                                       
except as
stated)
Revenue     832       801      4   %   859      2,472    2,243   10  %
EBITDA      64        36       77  %   95       216      305     (29 %)
PAT         (8      )  (17    )  52  %   32       18       110     (84 %)
CoP ($/MT)  1,995     1,880    6   %   1,970    1,958    1,984   (1  %)
CoP         108,000   98,200   10  %   108,800  106,800  95,400  12  %
(Rs./MT)
Aluminum
LME Price   1,997     2,090    (4  %)  1,918    1,964    2,360   (17 %)
($/MT)
                                                                  

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

EBITDA during Q3 was higher compared with the corresponding prior quarter,
primarily on account of higher premiums, which more than offset the impact of
higher CoP in rupee terms and lower LME prices.

Q3 aluminium CoP was higher as compared with the corresponding prior quarter
on account of higher alumina cost and higher coal prices due to tapering of
coal linkage.

The first 300MW unit of the BALCO 1,200MW captive power plant is awaiting
regulatory approvals. We plan to tap the first metal at the 325 ktpa Korba-III
aluminium smelter in Q1 FY2014. The smelter plans to initially draw power from
the existing 810 MW power plants.

For the 211 mt coal block at BALCO, we have received the second stage forest
clearance during the quarter and expect to commence mining in Q1 FY2014.


Aluminium Business – Vedanta Aluminium Limited (Associate Company)

            Q3                              Q2         Nine months period
Production                            %                                            %
(in’000      FY2013     FY2012     change  FY2013     FY2013     FY2012     change
tonnes, or                            YoY                                          YoY
as stated)
Alumina –    104       236       (56 %)  205       527       687       (23 %)
Lanjigarh
Aluminum –   135       111       21  %   134       394       314       25  %
Jharsuguda
                                                                     
Financials
(in Rs.
crore                                                                 
except as
stated)
Revenue      1,713     1,444     19  %   1,819     5,213     4,117     27  %
EBITDA       248       102       143 %   225       736       341       116 %
Forex        (295    )  (339    )  13  %   280       (131    )  (544    )  76  %
gain/(loss)
PAT          (766    )  (893    )  14  %   (206    )  (1,537  )  (2,076  )  26  %
SIIL Share   (226    )  (263    )  14  %   (61     )  (453    )  (612    )  26  %
(29.5%)
Aluminium    1,928     2,004     (4  %)  1,905     1,892     2,280     (17 %)
CoP ($/MT)
Aluminium
CoP          104,400   103,100   1   %   105,300   103,200   107,500   (4  %)
(Rs./MT)
Aluminium
LME Price    1,997     2,090     (4  %)  1,918     1,964     2,360     (17 %)
($/MT)
                                                                           

During the quarter, we temporarily suspended operations at the Lanjigarh
alumina refinery due to lower availability of bauxite. VAL is in discussions
with the concerned authorities and other stakeholders for sourcing of bauxite
from Orissa and other states to restart the refinery operations. We produced
104,000 tonnes of Alumina during the quarter as compared with 236,000 tonnes
during the corresponding prior quarter.

The Jharsuguda-I smelter operated above its rated capacity. Aluminium
production was 21% higher in Q3 as compared with the corresponding prior
period on account of full capacity utilization and higher operational
efficiencies.

Q3 Aluminium CoP was stable in rupee terms due to better operational
efficiencies, lower power consumption and lower coal cost despite increased
cost of alumina. VAL achieved the best quarterly operational efficiency, and
CoP remained in the lower half of the global cost curve.

Q3 EBITDA was significantly higher than the corresponding prior quarter, on
account of higher production and higher metal premiums. EBITDA margin also
improved due to higher conversion of primary metal into value added products.
46% of primary metal was converted to value added products in Q3 compared to
40% last year.

PAT during the quarter improved due to higher EBITDA and lower mark to market
loss on foreign currency borrowings as compared to the corresponding prior
quarter.


Status of Investment in Vedanta Aluminium Limited as at 31 December 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              8,140     853      18,210    27203
Total Funding                    11,703    2,244    18,210    32,157
Corporate Guarantees             6,538     23,271   -         29,809


Power Business

               Q3                         Q2      Nine months period
Particulars                        %                                    %
(in million     FY2013  FY2012  change   FY2013  FY2013  FY2012  change
units)                             YoY                                  YoY
Total Power     1,916   1,997   (4%)     2,474   6,848   5,412   27%
Sales
SEL ^1          1,578   1,559   1%       1,940   5,457   3,964   38%
Balco 270MW     275     382     (28%)    346     959     1,192   (20%)
Power Sales
HZL Wind Power  62      56      12%      188     432     256     69%
                                                          
Financials (in
Rs. crore                                                  
except as
stated)
Revenue ^2      520     574     (9%)     885     2,267   1,775   28%
EBITDA          155     147     5%       300     784     447     75%
PAT             (28)    35      (180%)   113     168     108     55%
Average Power   2.29    2.47    (7%)     2.22    2.16    2.50    (14%)
CoP (Rs./unit)
Average Power
Realization     3.35    3.44    (3%)     3.45    3.42    3.60    (5%)
(Rs./unit)
SEL CoP         2.22    2.64    (16%)    2.31    2.23    2.78    (20%)
(Rs./unit)
SEL
realization     3.31    3.49    (5%)     3.42    3.43    3.70    (7%)
(Rs./unit)
                                                                

           Includes production under trial run of 456 million units in Q3
   1.  FY2013 vs. 428 million units in Q3 FY2012, and 795 million units in
           nine months period FY2013 vs. 717 million units in nine months
           period FY2012.
      2.   Includes intercompany sale of Rs. 4 crore in nine months period
           FY2012.
           

Power sales were at 1,916 million units in Q3, 4% lower than last year. During
the quarter, PLF was 31%, considering three commissioned units of the 2,400MW
Jharsuguda power plant, constrained by continued evacuation limitations that
were imposed after the Northern and Eastern region grid failure in August
2012.

The evacuation capacity has improved with the charging of a shared 1,000MW
Raipur-Wardha transmission line in January 2013, and PLFs for the 3
commissioned units are expected to be around 50% in Q4 FY2013. The fourth unit
is currently under trial run, and is expected to be stabilised by the end of
the current quarter.

Power sales at the Balco 270 MW plant were 28% lower in Q3 due to similar
evacuation constraints.

In spite of lower sales realisation, EBITDA for Q3 was marginally higher due
to lower power generation cost at SEL.

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

Port Projects

In October 2010, we had been awarded a 30-year concession to upgrade the coal
berth at Vishakhapatnam Port to 10.18mtpa (Coal Berth mechanization project)
and operate it. This is being implemented at a total project cost of $150mn
through Vizag General Cargo Berth Private Limited (VGCB), a  74:26 joint
venture between Sterlite Industries (India) Ltd. and Leighton Welspun
Contractors Private Ltd. VGCB has obtained provisional Commercial Operations
Declaration and is expected to commence operations in the current quarter.

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 31 December 2012, the company has cash, cash
equivalents and liquid investments of Rs. 23,472 crore, out of which Rs.
13,302 crore was invested in debt mutual funds and bonds, and Rs. 10,170 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:

Ashwin Bajaj                                sterlite.ir@vedanta.co.in
Senior Vice President – Investor Relations   Tel: +91 22 6646 1531
                                             
Sheetal Khanduja                             sterlite.ir@vedanta.co.in
AGM – Investor Relations                     Tel: +91 22 6646 1531
                                             

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 mattersof 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

Contact:

Sterlite Industries (India) Limited
Ashwin Bajaj, +91 22 6646 1531
Senior Vice President – Investor Relations
sterlite.ir@vedanta.co.in
or
Sheetal Khanduja, +91 22 6646 1531
AGM – Investor Relations
sterlite.ir@vedanta.co.in
 
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