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Sterlite Industries (India) Limited Unaudited Consolidated Results for the Second Quarter and Half year ended 30 September 2010


October 27, 2010 - Mumbai, Maharashtra, India

Sterlite Industries (India) Limited (“SIIL” or the “Company”) has announced its unaudited consolidated results for the second quarter (“Q2”) and half year ("H1") ended 30 September 2010.

Highlights

  • Robust financial performance

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Revenues for Q2 and H1 were ` 6,029 crore and ` 11,953 crore respectively

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PBIDT for Q2 and H1 was up 18% and 35% at ` 2,107 crore and ` 4,282 crore respectively

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Attributable PAT for Q2 and H1 was ` 1,008 crore and ` 2,016 crore respectively
  • Record Zinc and Lead mined metal production
  • Strong balance sheet with cash and liquid investments of ` 23,994 crore

Financial Highlights

(In ` crore, except as stated)

Particulars Quarter ended

30 September

Change Half Year Ended

30 September

Change
2010 2009 % 2010 2009 %
Net Sales/Income from operations 6,029 6,104 (1.2) 11,953 10,684 11.9
Profit before interest, depreciation & taxes 2,107 1,780 18.4 4,282 3,165 35.3
Taxes 456 259 824 490
Profit After Taxes 1,418 1,240 14.3 2,881 2,164 33.1
Minority Interest 385 368 761 690
Share in Profit/(Loss) of Associate (25) 86 (103) 157
Attributable PAT after exceptional item 1,008 959 5.1 2,016 1,632 23.6
Earnings per Share (EPS) (` /share)* 3.0 2.9 6.0 5.0

*Not Annualised

Zinc Business

Particulars Quarter ended

30 September

Change Half Year Ended

30 September

Change
2010 2009 % 2010 2009 %
Production (in Kt, except for silver)
Mined Metal* 205 193 6.4 387 375 3.0
Refined Metal* 192 154 24.8 372 311 19.7
Silver (in 000’s Kgs) 44 40 8.6 87 82 6.5
Financials
Revenue (` Cr) 2,146 1,768 21.4 4,073 3,257 25.1
EBITDA (` Cr) 1,102 1,053 4.7 2,102 1,813 16.0
CoP with Royalty ($/MT) 977 807 21.1 997 782 27.5
Zinc LME ($/MT) 2,013 1,762 14.3 2,015 1,621 24.3

*Zinc and Lead

During Q2, the company achieved its highest ever zinc and lead mined metal production at 204,836 tonnes, up 6% compared with the corresponding prior quarter, primarily on account of stabilization of the new concentrator at Rampura Agucha.

During the same period, zinc refined metal production was highest ever at 176,239 tonnes, up 25% compared with the corresponding prior quarter. The increase in the production was primarily on account of contribution from the new 210 ktpa Hydro Zinc smelter at Dariba, which contributed 39,000 tonnes in Q2.

Refined Lead metal production increased 20% to 16,167 tonnes compared with the corresponding prior quarter.

Refined silver production during Q2 was 43,953 kilograms, an increase of 8.6% compared with the corresponding prior quarter. The increase in production was primarily on account of higher silver content in the mined ore and improved plant efficiencies.

Revenues for Q2 and H1 were at ` 2,146 crores and ` 4,073 crores respectively, compared with ` 1,768 crores and ` 3,257 crores in the corresponding prior periods. EBITDA for Q2 and H1 was ` 1,102 crores and ` 2,102 crores respectively compared with ` 1,053 crore and ` 1,813 crore in the corresponding prior periods. The revenue from silver in Q2 was ` 108 crores.

The positive impact of higher volumes and improved LME prices was partly offset by an increase in met coke and coal costs, increase in input commodity prices and higher stripping cost at mines. As a result of the same, net zinc metal cost with royalty during Q2 was higher at ` 45,000 per MT (US$977).

During Q2, average zinc and lead LME prices were US$2,013 per tonne and US$2,031 per tonne respectively, compared with US$1,762 per tonne and US$1,928 per tonne, in the corresponding prior quarter.

The 100 ktpa lead smelter at the Dariba Smelting Complex is expected to be commissioned during Q3 FY11. Primary mine development activity at Sindesar Khurd Mine (SKM) is on schedule. The new 1.50 mtpa mill at SKM is expected to commence production by the end of Q3 FY11. We remain on track to achieve a capacity of 500 tonnes of silver by FY 2013.

Copper Business

Particulars Quarter ended

30 September

Change Half Year Ended

30 September

Change
2010 2009 % 2010 2009 %
Production (Kt)
Mined Metal Content 7 5 37.9 14 12 11.0
Cathodes 68 91 (25.8) 145 169 (14.5)
Financials
Revenue (` Cr) 3,023 3,565 (15.2) 6,114 5,862 4.3
EBITDA (` Cr) 209 203 3.0 468 319 46.8
Gross CoP – cathode (¢/ lb) 19.78 15.76 25.5 20.20 15.71 28.6
Tc/Rc ( c/ lb) 11.75 14.33 (18.0) 12.65 13.20 (4.3)
LME ($/MT) 7,344 5,859 25.3 7,131 5,276 35.1

During Q2, copper cathode production at the Tuticorin smelter was 67,721 tonnes, which was 25.8% lower than the corresponding prior quarter due to the planned bi-annual maintenance shutdown for 22 days that began on June 22, 2010. Production of copper cathode in H1 was 144,833 tonnes compared with 169,000 tonnes in the corresponding prior period.

Mined metal production at CMT Australia was 7,220 tonnes and 13,842 tonnes in Q2 and H1 respectively.

Revenues for Q2 and H1 was ` 3,023 crore and ` 6,114 crore respectively, compared with ` 3,565 crore and ` 5,862 crore in the corresponding prior periods. EBITDA for Q2 and H1 were ` 209 crore and ` 468 crore respectively, compared with ` 203 crore and ` 319 crore in the corresponding prior periods.

Net CoP for Q2 and H1 was at 7.27 USc/lb and 7.08 USc/lb, compared with 10.20 USc/lb and 10.93 USc/lb, respectively in the corresponding prior periods. Reduction in net cost is largely on account of improved sulphuric acid realisation partly offset by higher manufacturing costs on account of scheduled biannual maintenance.

Realised TC/RC during Q2 and H1 were 11.75 USc/lb and 12.65 USc/lb respectively, compared with 14.33 USc/lb and 13.20 USc/lb in the corresponding prior periods.

Construction of the captive power plant at Tuticorin is in progress and the first unit is now scheduled for commissioning in Q4 FY2012. While the MoEF clearance is in place for the 400 ktpa copper smelter expansion project at Tuticorin, the project is being rescheduled awaiting consent from the State Pollution Control Board.

Aluminium Business

Particulars Quarter ended

30 September

Change Half Year Ended

30 September

Change
2010 2009 % 2010 2009 %
Production (Kt)
Balco 65 64 12.0 128 136 (5.9)
VAL 97 56 74.5 174 109 60.3
Financials*
Revenue (` Cr) 718 634 13.2 1,384 1,270 9.0
EBITDA (` Cr) 144 117 23.6 229 250 (8.6)
CoP ($/MT) 1,748 1,507 16.0 1,780 1,421 25.3
LME ($/MT) 2,089 1,819 14.9 2,090 1,652 26.5

*Financial data pertains to Balco only

During Q2 and H1, the aluminium production from BALCO II smelter was higher than its rated capacity at 65,000 tonnes and 128,000 tonnes respectively. BALCO I CPP continues to sell surplus power and its performance is shown separately in the “Power” segment.

Revenues for Q2 and H1 were ` 718 crore and ` 1,384 crore respectively, compared with ` 634 crore and ` 1,270 crore in the corresponding prior periods. EBITDA for Q2 and H1 were ` 144 crore and ` 229 crore respectively, compared with ` 117 crore and ` 250 crore in the corresponding prior periods.

During Q2, average aluminium LME increased to US$2,089 per tonne compared with US$1,819 per tonne in the corresponding prior quarter. Similarly for H1, average aluminium LME increased to US$2,090 per tonne compared with US$1,652 per tonne in the corresponding prior period.

CoP in Q2 and H1 were US$1,748 per tonne (` 81,268 per tonne) and US$ 1,780 per tonne (` 82,036 per tonne), compared with US$1,507 per tonne (` 72,791 per tonne) and US$1,421 (` 68,951 per tonne) in the corresponding prior periods. Increase in costs at BALCO was mainly due to higher Alumina costs and increase in coal prices.

Construction of the 1200MW captive power plant at BALCO is progressing well. In view of the final clearance not being granted for Niyamgiri mines the first metal tapping from the 325 ktpa aluminium smelter project at BALCO is being temporarily deferred and the entire output from the 1200 MW power plant will now be available for merchant sales.

The share of loss from VAL, as an associate, for Q2 and H1 were ` 25 crore and ` 103 crore, compared with a profit of ` 86 crore and ` 157 crore in the corresponding prior periods. Losses in VAL were primarily on account of interest and depreciation which could not be absorbed fully at the early stage of production ramp up and because of bauxite availability/logistics issue.

Power Business

Particulars Quarter ended

30 September

Change Half Year Ended

30 September

Change
2010 2009 % 2010 2009 %
Wheeled (Mn units) 414 336 23.4 894 622 43. 8
Financials*
Revenue (` Cr) 143 137 4.2 382 295 29.2
EBITDA (` Cr) 74 80 (7.5) 213 182 17.0
CoP (`/ unit) 1.75 1.39 26.0 1.71 1.34 27.7
Realisation (`/unit) 3.44 4.07 (15.4) 4.26 4.69 (9.1)

During Q2 and H1, we sold 414 million units and 894 million units of power respectively, compared with 336 million units and 622 million units in the corresponding prior periods.

Revenue (net of transmission and wheeling charges) for Q2 and H1 were ` 143 crore and ` 382 crore respectively, compared with ` 137 crore and ` 295 crore in the corresponding prior periods.

EBITDA for the same period was ` 74 crore and ` 213 crore respectively, compared with ` 80 crore and ` 182 crore in the corresponding prior periods.

The first unit of the 2400 MW (4x600MW) SEL power project was successfully synchronized in August 2010. The second unit is expected to be synchronized by Q3 FY2011.

Work on the 1980 MW (3x660MW) supercritical power project at Talwandi Sabo is progressing as scheduled. During the quarter, we also received permission to set up an additional unit of 660 MW power plant from Punjab Government. We expect to sell 85% in the spot market, from this unit.

Minority Interest

Minority Interest for Q2 was ` 385 crore (27.2%) comprising ` 332 crore at HZL and` 53 crore at BALCO, compared with ` 368 crore (29.6%) in the corresponding prior period. Minority interest percentage over PAT decreased during Q2, primarily on account of lower profit mix from BALCO and HZL.

Cash, Cash Equivalents and liquid investments

Company follows a conservative Investment Policy and invests in high quality Debt instruments in Mutual Fund and Fixed Deposit with Bank. As at 30 September 2010, the Company had cash and cash equivalents of ` 23,994 Crore, out of which ` 16,588 Crore was invested in debt mutual funds and ` 7,406 Crore was in fixed deposits with Banks.

About Sterlite Industries

Sterlite Industries is India's largest non-ferrous metals and mining company with interests and operations in aluminium, copper, zinc, lead & silver and power. It is a subsidiary of Vedanta Resources plc, a London-based diversified FTSE 100 metals and mining group. Sterlite Industries' main operating subsidiaries are Hindustan Zinc Limited for its zinc, lead & silver operations; Copper Mines of Tasmania Pty Limited for its copper operations in Australia; and Bharat Aluminium Company Limited for its aluminium operations. The company operates its own copper operations in India. The company has entered the commercial energy generation business and is in the process of setting up a 2,400MW independent power plant through its wholly owned 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.

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CONTACTS : Sterlite Industries (India) Limited Ashwin Bajaj, Vice President - Investor Relations +91 22 6646 1531 sterliteinvestorrelations@vedanta.co.in or Sheetal Khanduja, AGM - Investor Relations +91 22 6646 1531 sterliteinvestorrelations@vedanta.co.in
CONTACTS : Sterlite Industries (India) Limited Ashwin Bajaj, Vice President - Investor Relations +91 22 6646 1531 sterliteinvestorrelations@vedanta.co.in or Sheetal Khanduja, AGM - Investor Relations +91 22 6646 1531 sterliteinvestorrelations@vedanta.co.in , ,

Source: Business Wire India

BusinessWireIndia

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