Sterlite Industries (India) Limited Unaudited Consolidated Results for the First Quarter Ended 30 June 2013 Business Wire MUMBAI, India -- July 26, 2013 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 FY2014 FY2013 % change YoY FY2013 stated) 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 934 1,202 (22%) 1,925 item Basic Earnings per Share (Rs./share) 2.78 3.57 (22%) 5.73 Underlying Earnings per Share* 3.17 3.99 (21%) 5.77 (Rs./share) 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 FY2014 FY2013 % change YoY FY2013 stated) 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 96 73 31% 108 tonnes) ^2 Refined Saleable Silver - Integrated 77 71 9% 91 (in tonnes) 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 ($/oz) 23.1 28.3 (18%) 30.1 1. Including captive consumption of 1,644 tonnes in Q1 FY 2014 vs. 1,641 tonnes in Q1 FY 2013 and 1,777 tonnes in Q4 FY 2013. 2. Excluding captive consumption of 8.8 tonnes in Q1 FY 2014 vs. 8.6 tonnes in Q1 FY 2013 and 9.2 tonnes in Q4 FY 2013. 3. Including zinc concentrate sale of nil in Q1 FY 2014 vs. nil in Q1 FY 2013 and 61,097 tonnes metal in concentrate in Q4 FY 2013. During Q1, mined metal production was 27% higher than the corresponding prior quarter. The increase in production was in line with our plan to deliver 1 million tonne mined metal production for the year. Integrated production of refined zinc was 10% higher, due to higher smelter utilization. Integrated production of refined lead was in line with the corresponding prior quarter. Integrated saleable silver production was 9% higher driven by higher volumes from Sindesar Khurd and Zawar mines. Revenues were higher by 9% on account of higher sales volume and depreciation of Indian Rupee, partially offset by lower metal prices. The zinc cost of production (COP) without royalty was 2% higher in Rupee terms and 1% lower in US Dollar terms. The increase in Rupee COP was primarily due to lower sulphuric acid credits and higher excavation costs, partially offset by lower coal prices, lower specific coal consumption and the benefits of higher volumes. EBITDA was 7% higher on account of higher volume partially offset by higher operating costs. PAT for the quarter was 6% higher at Rs. 1,630 Crore. Zinc - International Business Q1 Q4 Production (in’000 tonnes, or as FY2014 FY2013 % change YoY FY2013 stated) Mined metal content- BMM and Lisheen 56 70 (21%) 65 Refined Zinc – Skorpion 34 36 (4%) 36 Total 90 106 (15%) 102 Financials (In Rs. crore, except as stated) Revenue 938 1,012 (7%) 1,130 EBITDA 298 337 (12%) 434 PAT 190 190 - 267 CoP – ($/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 FY2014 FY2013 % change YoY FY2013 stated) Copper - Mined metal content 6 7 (13%) 7 Copper - Cathodes 16 88 (82%) 86 Tuticorin power sales (million 137 - - 35 units) 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 ($/MT) 7,148 7,869 (9%) 7,931 NM = Not Meaningful. During Q1, mined metal production at Australia was 13% lower due to lower grades. Copper cathode production was lower due to a temporary closure of the Tuticorin smelter for most of the quarter. EBITDA was lower due to fixed expenses of the Tuticorin smelter partially offset by gains on sale of surplus power from the first 80 MW unit of Tuticorin power plant. Contribution from Australian operations was affected by lower sales volume, lower LME and higher COP. Following the Tamil Nadu Pollution Control Board’s (TNPCB) order for closure of the Tuticorin copper smelter on March 29, 2013, the National Green Tribunal (NGT) after hearing company's appeal, passed an interim order on May 31, 2013 conditionally allowing the smelter to recommence operations, and the plant restarted on June 23, 2013. On July 15, 2013, an expert committee confirmed that the plant meets the prescribed standards, and the NGT in its order of even date took cognizance of the findings of the expert committee and observed that the company "is neither an existing pollutant nor is a threat of future pollution (not violating prescribed standards) resulting in health hazards", and declined to modify its earlier interim order dated 31st May, 2013, enabling the plant to continue to operate. Separately, the TNPCB has also filed an appeal against the NGT’s earlier interim order before the Supreme Court. Aluminium Business - BALCO Q1 Q4 Production (in’000 tonnes, or as FY2014 FY2013 % change YoY FY2013 stated) Aluminium 61 60 1% 62 Financials (In Rs. crore, except as stated) Revenue 745 780 (5%) 954 EBITDA 28 57 (51%) 85 PAT (63) (7) - 20 CoP ($/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 FY2014 FY2013 % change YoY FY2013 stated) 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 June2013 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 Jharsuguda^1 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 2.15 2.02 6% 1.81 (Rs./unit) 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 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 firstname.lastname@example.org Sheetal Khanduja, +91 22 6646 1531 AGM – Investor Relations email@example.com
Sterlite Industries (India) Limited Unaudited Consolidated Results for the First Quarter Ended 30 June 2013
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