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Sterlite Industries (India) Limited Consolidated Results For The Fourth Quarter And Year Ended 31 March 2012

Stocks in this article: SLT

Sterlite Industries (India) Limited ("SIIL" or the "Company") today announced its audited consolidated results for the fourth quarter ("Q4") and full year ended 31 March 2012 ("FY 2012").

 

FY 2012 Highlights

 

● Operational Performance

○ Record production of refined Zinc, Lead and Silver at Zinc-India operations

○ Record Power production

▪ Commissioned two 600 MW units of the Jharsuguda power plant and synchronized the fourth 600 MW unit

● Reserves and Resources

○ Zinc-India added 27.1 mn tonnes of R&R, prior to depletion of 8.04 million tonnes

○ Mine life extended at all three assets at Zinc-International

Financial performance

○ Revenues Rs. 40,967 crore, up 35%

○ EBITDA at Rs. 10,169 crore, up 26%

○ PAT at Rs. 7,761 crore, up 6% after exceptional items of Rs. 473 crore.

● Strong balance sheet with cash and liquid investments of Rs. 23,403 crore

● Highest ever dividend at Rs. 2/share for FY2012, including interim dividend Re.1/share

● Contribution of around Rs. 5,500 crore to Indian exchequer in terms of taxes, duties and royalties

● Merger with Sesa Goa Limited and Vedanta Group Consolidation announced.

 

Anil Agarwal, Chairman, Sterlite Industries (India) Ltd said ; "Sterlite Industries delivered strong operating and financial performance during the year, despite macroeconomic headwinds. We continue to deliver on our growth projects, expanding and optimizing our assets to generate strong returns for our shareholders. The board has approved a dividend of Rs. 2/share for FY2012. Last quarter, we announced a merger of Sterlite with Sesa Goa, and simplification of the Vedanta Group structure. The merger process is well on track to create one of the world's largest natural resource majors, and deliver significant long term value for shareholders."

 

Financial Highlights

 
Particulars Quarter ended

31 March

Change Years Ended

31 March

Change
  2012 2011 % 2012 2011 %
Net Sales/Income from operations 10,763 10,000 7.6 40,967 30,248 35.4
EBITDA 2,705 3,051 (11.6) 10,169 8,050 26.3
Interest expense (excluding forex gain/loss) 328 118 177.3 852 351 142.9
Forex gain/(loss) 331     (305)    
Profit before Depreciation and Taxes 3,412 3,680 (7.3) 12,174 10,221 19.1
Depreciation 507 352   1,830 1,030  
Profit before Exceptional items 2,905 3,328   10,344 9,190  
Exceptional Items 432 32   473 57  
Taxes 487 566   2,111 1,812  
Profit After Taxes 1,987 2730 (27.2) 7,761 7,322 6.0
Minority Interest 550 726   2,161 1,995  
Share in Profit/(Loss) of Associate (160) (80)   (772) (285)  
Attributable PAT after exceptional item 1,277 1,925 (33.7) 4,828 5,043 (4.3)
Basic Earnings per Share (Rs./share) 3.8 5.7   14.4 15.0  
Underlying Earnings per Share (Rs./share)* 4.1 5.8   16.7 15.0  
Exchange rate (Rs./$) – Average 50.3 45.3   47.9 45.6  
 

* Excluding FX gain/loss and exceptional items

 

Consolidated Financial Performance

 
Revenues for the year were Rs. 40,967 crore, an increase of 35.4%, and revenues for Q4 were Rs. 10,763 crore, up 7.6%, driven by higher volumes as several of our growth projects commenced operations and ramped up production, and the successful integration of the Zinc International business acquired in second half of FY 2011. In line with the increased revenues, EBITDA for the year was up 26.3% at Rs. 10,169 crore. EBITDA for Q4 was down 9.2% at Rs. 2,771 crore, due to lower LME prices, partially offset by higher volumes.
 

Due to the volatility of the Indian Rupee witnessed during the year, the Company incurred Forex losses which impacted profitability. During Q4, the Company also recognized an exceptional loss of Rs. 423 crores due to an unfavorable ruling by the US courts in connection with the cancellation of the share purchase agreement entered with ASARCO in 2009. Underlying earnings per share (excluding foreign exchange and exceptional items) was up 11.3% for the year.

 
The Company continued to maintain a strong balance sheet and financial position, with cash and liquid investments totaling to Rs.23,403 crore on 31 March 2012
 

Merger of Sterlite and Sesa Goa Limited and Vedanta Group Consolidation

 
During the quarter, we announced the merger of Sesa Goa Limited and Sterlite Industries, and Vedanta Group Consolidation. This merger will create one of the world's largest diversified natural resources companies with interests in Zinc-Lead-Silver, Iron Ore, Oil & Gas, Copper, Aluminium and Commercial Power. The merged entity will have operations in India, Australia, South Africa, Namibia, Ireland, Liberia and Sri Lanka.
 
The merger is on track for completion in CY 2012, as previously announced. Documentation relating to the merger is expected to be distributed to each company's shareholders in May 2012 and the respective shareholder meetings to approve the merger are expected to be held in June 2012. After receiving the BSE and NSE approvals, the Companies have filed petitions in the respective High Courts. The Competition Commission of India has approved the transaction and an application for the approval of Foreign Investment Promotion Board has been filed.
 

Dividend

 
The Board has recommended a final dividend of Rs. 1 per share, taking the total dividend for FY2012 to Rs. 2 per share, which is the highest ever dividend proposed by the company. The total dividend outgo will nearly double to Rs. 686 crore as against Rs. 370 Crore during the previous year.
 

Zinc – India Business

 
Particulars Quarter ended

31 March

Change Year Ended

31 March

Change
  2012 2011 % 2012 2011

%

Production ( in Kt, except for silver)            
Mined Metal – Zinc and Lead 223 231 (3.3) 830 840 (1.1)
Total Refined Zinc 190 194 (2.0) 759 712 6.0
Integrated zinc 189 187 1.1 752 693 1.0
Total Refined Lead 37 18 110 99 63 56.0
Integrated Lead 31 18 77 89 63 41.0
Total Refined Silver 88 50 77 242 179 35.0
Integrated Silver 83 50 67 237 179 32.0
             
Financials (In Rs. Crore, except as stated)            
Revenue 3,062 3,182 (3.8) 11,132 9,844 13.1
EBITDA 1,642 1,956 (16.0) 5,993 5,556 7.9
PAT 1,418 1,769 (19.8) 5,506 4,898 12.4
Zinc CoP without Royalty ($/MT) 828 784 5.6 834 808 3.2
Zinc CoP with Royalty ($/MT) 995 979 1.6 1,010 990 2.0
Zinc LME ($/MT) 2,025 2,393 (15.4) 2,098 2,185 (4.0)
Lead LME ($/MT) 2,093 2,605 (19.6) 2,269 2,244 1.1
Silver LBMA ($/oz) 32.6 31.9 2.0 35.3 23.9 48.0
  (1)   Including captive consumption of 2,156 tonnes in Q4 FY 2012 vs 1,340 tonnes in Q4 FY 2011 and 6,625 tonnes in FY 2012 vs 5,898 tonnes in FY 2011
 
(2)

Including captive consumption of 11,345 Kgs in Q4 FY 2012 vs 7,016 Kgs in Q4 FY 2011 and 34,917 Kgs in FY 2012 vs 30,997 Kgs in FY 2011

 

Mined metal production at Hindustan Zinc Limited ("HZL") was 223,000 tonnes in Q4 and 830,000 tonnes in FY2012, compared with 231,000 tonnes and 840,000 tonnes in the corresponding prior periods. The marginal decline was due to a temporary decline in ore grade at Rampura Agucha mine, partially offset by higher metal recoveries across all mines and increased production at Sindesar Khurd mine ("SK mine"). SK mine ramped to 80% utilization in Q4 and will deliver volumes near its capacity in FY2013.

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