Sterlite Industries (India) Limited Consolidated Results For The Third Quarter And Nine Months Ended 31 December 2011

Sterlite Industries (India) Limited (“SIIL” or the “Company”) today announced its unaudited consolidated results for the third quarter (“Q3”) and nine months (“nine month period”) ended 31 December 2011.

Highlights of the quarter

Operational Performance
  • Record production volumes of refined Lead and Silver at Zinc India operations
  • Commissioned the 350tpa silver refinery at Zinc India

Financial performance
  • Revenues up 24% at Rs. 10,246 crore
  • EBITDA up 17% at Rs. 2,318 crore
  • PAT at Rs. 914 Cr after foreign exchange loss of Rs. 425 crore
  • Strong balance sheet with cash and liquid investments of Rs. 21,546 crore

Financial Highlights
 

(In Rs. crore, except as stated)
     
Particulars  

Quarter ended 31 December
 

Change
 

Nine Months Ended31 December
  Change
    2011   2010   %   2011   2010   %
Net Sales/Income from operations   10,246   8,294   23.5   30,204   20,248   49.2
EBITDA   2,318   1,979   17.2   7,559   4,991   51.4
Interest expense (excluding forex)   157   74       459   217    
Exchange gain/(loss)   (425)   (18)       (798)   22    
Profit before depreciation and taxes (PBDT)   2,606   2,382   9.4   8,721   6,516   33.8
Depreciation   458   249       1,323   678    
Taxes   505   421       1,624   1,245    
Profit After Taxes   1,643   1,711   (4.0)   5,775   4,592   25.8
Minority Interest   466   508       1,611   1,269    
Share in Profit/(Loss) of Associate   (264)   (102)       (612)   (205)    
Attributable PAT after exceptional item   914   1,101   (17)   3,551   3,118   13.9
Basic Earnings per Share (EPS) (Rs. /share)*   2.7   3.3       10.6   9.3    
Underlying earnings per Share (EPS) (Rs./share)* (Before FX loss)   4.0   3.3       12.9   9.2    
Exchange rate (Rs/$)   51.0   45.3   12.7   47.2   45.7   3.2

*Not Annualized

Zinc India Business

Particulars
 

Quarter ended 31 December
 

Change
 

Nine Months Ended31 December
 

Change
    2011   2010   %   2011   2010   %

Production (in Kt, except for silver)
                       

Mined Metal
  209   222   (6.0)   607   609   (0.3)
Refined Metal – Zinc   191   178   7.1   569   519   9.6
Refined Metal – Lead(1)   29   14   102.0   62   46   35.5
Silver (in 000’s Kgs) (2)   58   42   37.1   154   129   18.9
                         
Financials                        
Revenue (Rs. Cr)   2,726   2,589   5.3   8,070   6,663   21.1
EBITDA (Rs. Cr)   1,373   1,497   (8.3)   4,351   3,600   20.9
PAT (Rs. Cr)   1,278   1,303   (1.9)   4,087   3,129   30.6
CoP with Royalty ($/MT)   944   988   4.5   1,015   994   (2.1)
CoP without Royalty ($/MT)   785   790   0.7   836   817   (2.3)
Zinc LME ($/MT)   1,897   2,315   (18.0)   2,123   2,116   0.3
Lead LME ($/MT)   1,983   2,390   (17.0)   2,328   2,124   9.6

(1) Includes captive consumption of 1,730 tonnes in Q3 FY2012 vs. 1,746 tonnes in Q3 FY2011, and 4,469 tonnes in ‘nine months period’ FY2012 vs. 4,558 tonnes in ‘nine months period’ FY2011.

(2) Includes captive consumption of 9,182 Kgs. in Q3 FY2012 vs. 9,236 Kgs. in Q3 FY2011, and 23,571 Kgs. in ‘nine months period’ FY2012 vs. 23,981 Kgs. in ‘nine months period’ FY2011.

Mined metal production in Q3 was marginally lower at 209,007 tonnes, compared with the corresponding prior quarter. Refined Zinc production in Q3 was up 7% at 190,946 tonnes, compared with the corresponding prior quarter primarily on account of improved throughput and operational efficiencies.

Refined Lead production in Q3 was highest ever at 28,804 tonnes, up 102%, compared with the corresponding prior quarter. The increase in production was due to volume contribution from the newly commissioned 100kt Dariba Lead smelter, currently under ramp-up.

Refined Silver production in Q3 was highest ever at 57,595 kg, up 37% compared with the corresponding prior quarter. This was mainly attributable to higher input from the mines and volume contribution from the new 350tpa Silver refinery commissioned during the quarter.

Revenues and EBITDA for Q3 were Rs. 2,726 crore and Rs. 1,373 crore respectively. The decrease in EBITDA was mainly on account of lower LME prices, higher coal costs and manufacturing expenses, which more than offset the benefit of higher volumes and higher realisation on account of rupee depreciation.

The Zinc metal cost, without royalty, during the quarter was Rs. 40,300 per MT ($785), 13% higher in INR, compared with the corresponding prior quarter. The positive impact of operational efficiencies was more than offset by increase in commodity prices and other inflationary factors.

The average Silver Cash Settlement Price per London Bullion Market Association increased to $31.87/oz in Q3 FY2012 from $26.43/oz in the corresponding prior quarter. The silver revenue increased to Rs. 255 Cr from Rs. 116 Cr in corresponding prior period.

Expansion Projects

Ramp-up of the Sindesar Khurd mine is on track to achieve its targeted 2.0mtpa capacity. The 100ktpa Dariba Lead smelter, commissioned during Q2, is ramping up well. The new 350tpa Silver refinery has been successfully commissioned during the quarter. The mine development work at proposed 1.0mt Kayar mine has commenced.

Zinc International Business
Particulars  

Quarter Ended31st December
 

Quarter Ended30th September
 

Change
 

Nine Months Ended31 December
   

2011
  2011   %   2011
Production (Kt)                
Mined Metal Content (MIC)- BMM & Lisheen   71   77       228
Refined Metal content – Skorpion   34   37       109
Total   105   114   (7.9)   337
                 

Financials
               
Revenue (Rs. Cr)   1,030   1,160   (11.2)   3,251
EBITDA (Rs. Cr)   342   526   (35.0)   1,385
PAT (Rs. Cr)   201   342   (41.2)   860
CoP – ($ per MT)   1,188   1,242   4.3   1,237
Zinc LME ($/MT)   1,897   2,224   (14.7)   2,123
Lead LME ($/MT)   1,983   2,459   (19.4)   2,328
       

The total equivalent zinc-lead production was 105,000 tonnes in Q3. This comprised production of zinc-lead concentrate of 71,000 tonnes MIC at BMM and Lisheen, and refined zinc production of 34,000 tonnes at Skorpion.

Revenues and EBITDA for Q3 were Rs. 1,030 crore and Rs. 342 crore respectively, a decrease of 11.2% and 35% respectively, compared with the immediately preceding quarter. EBITDA is lower on account of lower zinc and lead LME, partly offset by decrease in the production costs.

Copper Business
Particulars  

Quarter Ended 31st December
 

Change
 

Nine Months Ended31 December
 

Change
    2011   2010   %   2011   2010   %
Production (Kt)                        
Mined Metal Content   6   4   50.7   17   18   (2.4)
Cathodes   84   79   6.9   245   224   9.7
                         
Financials                        
Revenue (Rs. Cr)   5,130   4,626   10.9   15,068   10,740   40.3
EBITDA (Rs. Cr)   395   225   75.5   1,125   693   62.3
Exchange gain/(loss)   (179)   (6)       (376)   14    
PAT (Rs. Cr)   347   265   30.9   1,033   1,182   (12.6)
Net CoP – cathode (¢/ lb)   2.4   1.2       (1.4)   5.0    
Tc/Rc (¢ / lb)   15.9   11.2   42.6   14.3   12.1   17.8
LME ($/MT)   7,489   8,674   (13.7)   8,531   7,638   11.7
           

During Q3, copper cathode production at the Tuticorin smelter was 6.9% higher at 84,000 tonnes compared with the corresponding prior quarter.

Mined metal production at Australia mines was 6,000 tonnes in Q3.

Revenue and EBITDA for Q3 were Rs 5,130 crore and Rs 395 crore, an increase of 10.9% and 75.5% respectively, compared with the corresponding prior quarter, primarily on account of higher TcRcs, better margins on phosphoric acid sales, and positive impact of rupee depreciation.

Despite improved operational performance, the PAT was lower due to MTM loss on FCCB bond liabilities due to depreciation of Indian Rupee which resulted in a net exchange loss of Rs. 72 crore in Q3 after adjusting fair value gain on derivative portion.

In reference to Special Leave Petition (SLP) filed by the company against the closure order of the copper smelter at Tuticorin, the Honourable Supreme Court in subsequent hearings directed Tamil Nadu Pollution Control Board (TNPCB) to issue directions to implement the improvement measures suggested by National Environment Engineering Research Institute (NEERI), Central Pollution Control Board (CPCB) and TNPCB. The matter was last heard on 17th January 2012 and listed for further hearing on March 18 2012. The company is fully on track to implement the improvement measures suggested by TNPCB. Interim stay order granted by the Supreme Court continues and the unit continues to operate at rated capacity.

Expansion Projects

The construction of the captive power plant at Tuticorin is progressing well and the first unit of 80MW is scheduled for commissioning in Q4 FY2011-12.

Aluminium Business (BALCO)
Particulars  

Quarter Ended 31st December
  Change  

Nine Months Ended31 December
  Change
    2011   2010   %   2011   2010   %

Production (Kt)
                       
Aluminum   63   65   (4.3)   184   193   (5.0)
                         
Financials                        
Revenue (Rs. Cr)   801   802   (0.2)   2,243   2,186   2.6
EBITDA (Rs. Cr)   32   158   (79.7)   278   386   (27.9)
PAT (Rs. Cr)   (17)   103       110   197   (43.9)
CoP ($/MT)   1,880   1,795   (4.8)   1,984   1,785   (11.1)
LME ($/MT)   2,090   2,343   (10.8)   2,360   2,176   8.5
           

The BALCO aluminium smelter continues to operate at its rated capacity, with production of 63,000 tonnes during Q3.

Revenue and EBITDA for Q3 were Rs. 801 and Rs. 32 Crore respectively. EBITDA was lower on account of higher costs of production and lower LME prices, partly offset by the rupee depreciation. During Q3, the COP of hot metal produced was at Rs 98,234 per MT, 22% higher in INR, compared with the corresponding prior quarter. The increase in cost was primarily due to increase in costs of coal, alumina and carbon.

Expansion Project

The first metal tapping from the 325 ktpa aluminium smelter is now scheduled for Q2 FY2013. The first unit of the 1,200MW (4x300MW) captive power plant is expected to be synchronised in Q1 FY 2012-13.

Coal Block

We have made further progress on getting the required regulatory approvals for the 211 mn tonne coal block at BALCO. The EAC in its meeting held in Nov 2011 has accorded its approval for the project, paving the way for the remaining approvals.

Vedanta Aluminium Limited
Particulars  

Quarter Ended31 December
  Change  

Nine Months Ended31 December
  Change
    2011   2010   %   2011   2010   %
Alumina (Mt)   236   147   60.7   687   522   31.6
Aluminium (Mt)   107   103   4.4   308   277   11.3
Financials                        
Revenue (Rs. Cr)   1,444   1,216   18.7   4,117   3,086   33.4
EBITDA (Rs. Cr)   102   131   (22.1)   341   468   (27.1)
Exchange gain/(loss)   (339)   48       (544)   238    
PAT (Rs./ Cr)   (893)   (347)       (2,076)   (697)    
SIIL Share (Rs./Cr)   (264)   (102)       (612)   (205)    
Alumina COP ($/MT)   323   343   5.9   350   328   (6.7)
Aluminium COP ($/MT)   2,004   2,071   3.3   2,280   1,974   (15.5)
           

Alumina production at Lanjigarh was 236,000 tonnes in Q3. The Aluminium production in Q3 was 107,000 tonnes at Jharsuguda – I smelter.

Revenue and EBITDA for Q3 were Rs. 1,444 crore and Rs 102 crore respectively. The COP of hot metal produced during the quarter was Rs 102,224 per MT (US $2,004), 9% higher than the corresponding prior quarter due to higher coal and carbon costs. However, the CoP of hot metal during Q3 was lower by 22% compared to Q2 due to improved operational performance as expected.

During the quarter, there was a net loss of Rs. 893 Crore on account of compressed margins and higher finance cost due to Mark to Market loss on foreign exchange fluctuation on borrowings. The interest and finance charges during Q3 were Rs. 793 crore which includes MTM loss of Rs 339 crore due to currency depreciation.

The 1.25 mtpa Jharsuguda-II smelter project is in the final stages of completion, and we continue to evaluate the option of selling power versus producing aluminium at this smelter.

Status of Investment in Associate Company as at 31 Dec 2011
Investment In VAL (Rs. In Crore)  

Sterlite
  Vedanta   External   Total
Equity   563   1,391   NA   1,954
Quasi Equity / Debt   9,612   2,299   15,653   27,564
Total funding   10,175   3,690   15,653   29,518

Corporate Guarantees
  4,358   26,477   -   30,835
       

Energy Business
Particulars  

Quarter Ended31st December
  Change  

Nine Months Ended31 December
  Change
    2011   2010   %   2011   2010   %
Merchant sales (Mn units)                        
SEL *   1,559   245       3,964   294    
Balco 270 MW   382   418   (8.9)   1,192   1,192   (0.3)
WPP   56   36   54.9   256   156   63.3
Total   1,996   699       5,412   1,642    
Financials                        
Revenue (Rs. Cr)   574   123   365.3   1,775   505   251.4
EBITDA (Rs. Cr)   147   37   297.4   447   250   78.7
PAT (Rs. Cr)   35   18   98.3   108   153   (29.2)
Average CoP (Rs./ unit)   2.47   1.82   (35.7)   2.50   1.76   (42.1)
Net Realization (Rs./unit)   3.4   2.7   26.6   3.60   3.75   (4.0)
SEL CoP (Rs/unit)   2.6   -   -   2.78   -    
SEL realization (Rd/unit)   3.5   -   -   3.7   -    

* 428 MU and 717 MU generated under trial run in Q3 and nine months ended Dec 2011 respectively.

Power sales were 1,559 million units during Q3, significantly higher compared with the 245 million units in the corresponding prior quarter. The increase in power sales was mainly on account of sales from two 600 MW units at the 2,400 MW Jharsuguda power plant.

Revenue and EBITDA for Q3 were Rs.574 Crore and Rs.147 Crore respectively, an increase of 365% and 297% compared with the corresponding prior quarter. Increase in revenue was on account of higher sales from two units of 600 MW each commissioned in March and May 2011 and higher realisations of power.

During Q3, the generation cost at SEL was Rs 2.6 per unit as against the Rs 2.9 per unit in Q2 of 2011-12. The cost at SEL was lower on account of improved operating performance.

The third 600 MW unit is currently under trial run.

Expansion Projects

Work on the fourth 600 MW unit of the Jharsuguda power plant is progressing well and the same is expected to be synchronized in Q4 FY 2011-12.

Work on the power project at Talwandi Sabo is progressing as scheduled with synchronization of first unit scheduled for Q4 FY 2012-13.

We have commissioned 135MW of the 150MW expansion in wind power generation capacity announced in January 2011. The balance capacity is expected to be commissioned in early Q4 FY2012. Post the expansion, the Company’s wind power generation capacity will increase to 273MW.

Depreciation

Depreciation and amortization cost for the quarter was higher at Rs. 458 crore compared with Rs. 249 crore during the corresponding prior quarter, due to capitalisation of Dariba lead smelter at Zinc India operations, wind power project and two units of 600 MW at SEL, Jharsuguda and Rs 142 crore charged during the quarter on the assets of our Zinc International business.

Income Tax

Effective tax rate was at 23.5% for the current quarter compared with 19.7% in the corresponding prior period.

Foreign Currency Losses

Due to depreciation of Indian Rupee, the net impact of foreign currency exchange fluctuations during the quarter resulted in a loss of Rs 425.39 crore.

Cash, Cash Equivalents and liquid investments

As at 31 December 2011, on consolidated basis, the Company had cash and cash equivalents of Rs. 21,546 crore, out of which Rs. 13,683 crore was primarily invested in debt mutual funds and Rs. 7,863 crore was in Bank fixed deposits and current account balance with Banks.

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. The company is setting up 5,040 MW independent thermal power plants through its subsidiary Sterlite Energy Limited. 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 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.

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX