MUMBAI, July 29, 2015 /PRNewswire/ --
Strong Financial and Operational
Performance in a Volatile Commodity Price Environment
Vedanta Limited (formerly known as Sesa Sterlite Ltd./Sesa Goa
Ltd) today announced its unaudited consolidated results for the
first quarter ended 30 June
2015.
(Logo:
http://photos.prnewswire.com/prnh/20150422/740375)
Financial Highlights
- Revenues at Rs. 16,952 crore
- EBITDA at Rs. 4,039 crore is flat
sequentially; EBITDA margin[1] at
31%, improvement sequentially from 28%
- Attributable PAT at Rs. 866
crore, 76% higher sequentially
- Strong balance sheet with Cash & Cash Equivalents of over
Rs.47,000
crore
Operational Highlights
- Zinc-India: Mined and refined
metal production significantly higher y-o-y in line with mine-plan;
maintained lowest decile cost position
- Oil & Gas: Production volume of 209,738 boepd
- Steady Rajasthan production at 172,224 boepd; Gas production
grows 20%
q-o-q
- Ravva and Cambay production grew by 8% y-o-y
- Aluminium: Record quarterly aluminium production
notwithstanding weaker markets
- Copper India: Higher cathode
production at 98 kt and continued strong TCRC realisations
- Zinc International: Production steady at 70 kt; commenced
pre-stripping at Gamsberg
- Iron ore: Commenced ore sales at Karnataka; well positioned to
re-start mining in Goa post
monsoons
[1]Excludes custom smelting
at Zinc and Copper India operations
Mr. Tom Albanese, Chief Executive
Officer, Vedanta Limited, said: "In Q1 we saw continued
volatility in commodity prices, but Zinc has held
up quite well in view of its strong fundamentals and is now
the largest contributor to our EBITDA.
We continue to focus on improving efficiency, costs, and enhancing
production across our well-invested asset base. We have broken
ground at theGamsberg Zinc project in South Africa and remain on track to re-start
iron ore production at Goa
following the monsoons. Our diversified business model
supported by strong operating strengths and structurally low
cost assets will enable robust long term returns to
stakeholders."
Consolidated Financial Performance
The consolidated financial performance of the company during the
period is as under:
(In
Rs. crore, except as stated)
FY 15 Particulars Q1 Q4
Actual FY 2016 FY 2015 % Change FY2015
Net Sales/Income from
73,364 operations 16,952 17,056 -1% 17,732
22,226 EBITDA 4,039 5,670 -29% 3,986
41% EBITDA Margin[1] 31% 47% 28%
5,659 Finance cost 1,358 1,537 -12% 1,321
2,367 Other Income 893 1,210 -26% 41
(611) Forex loss/ (gain) (255) (141) 80% 184
Profit before Depreciation
19,363 and Taxes 3,782 5,416 -30% 2,550
Depreciation and
7,160 Amortisation of goodwill 1,717 2,064 -17% 764
Profit before Exceptional
12,204 items 2,065 3,352 -38% 1,787
22,129 Exceptional Items[2] - 2,128 - 19,956
1,448 Taxes[3] 352 (139) - 549
(11,373) Profit After Taxes 1,712 1,363 26% (18,718)
Profit After Taxes before
10,183 Exceptional items 1,712 2,990 -43% 1,166
4,276 Minority Interest 846 988 -14% 514
Attributable PAT after
(15,646) exceptional items 866 376 131% (19,228)
Attributable PAT before
5,060 exceptional items 866 1,341 -35% 491
Basic Earnings per Share
(52.77) (Rs./share) 2.92 1.27 131% (64.85)
Basic EPS before Exceptional
17.07 Items 2.92 4.52 -35% 1.66
Exchange rate (Rs./$) -
61.15 Average 63.50 59.77 6% 62.25
Exchange rate (Rs./$) -
62.59 Closing 63.75 60.09 6% 62.59
- Excludes custom smelting at Zinc and Copper India
operations
- Exceptional Items Gross of Tax
- Tax in Q1 FY2015 of Rs. 362
crore is netted off by tax impact of Rs. 501 crore on exceptional items. Tax in Q4
FY2015 of Rs. 620 crore is netted off
by tax impact of Rs.71 crore on
exceptional items
Revenues
Revenues in the quarter were largely flat at Rs 16,952 crore. Decline in crude oil prices by
44% y-o-y impacted revenues by Rs. 1,856
crore and was largely offset by higher revenues from Copper
India which had a maintenance shutdown during Q1 FY2015, higher
volumes in Zinc India and start up of Unit I of TSPL.
Sequentially, revenues for the quarter were lower by 4%.
Recovery in crude oil prices ($62 vs
$54) was more than offset by lower
premia in aluminium and lower sales volume in Zinc India as per the
mine plan.
EBITDA and EBITDA Margin
EBITDA at Rs. 4,039 crore was
lower by 29% due to a steep fall in crude oil prices and aluminium
premia. EBITDA was also impacted by one-time expense related to
Renewable
Purchase Obligations (RPO) provision of Rs 414 crore for the previous years (FY2013 to
FY2015) for the Aluminium, Zinc India and Copper - India businesses. Sequentially, EBITDA margins
excluding custom smelting increased by 300bps to 31% on the back of
recovery in crude oil prices.
Depreciation and Amortisation
Depreciation and amortisation for the quarter was marginally
lower at Rs 1,717 crore post
re-alignment of useful life of metal and mining assets and the
impairment of goodwill mostly in the oil and gas segment in Q4
FY2015 which was largely offset by capitalisation of assets in the
Oil and Gas segment, aluminium pot lines at Korba II smelter and
Unit 1 at TSPL.
Depreciation and amortisation in Q4FY2015 was significantly
lower on revision of the estimated useful lives of various assets
in our metals, mining and power businesses based on independent
technical study and management's assessment with effect from
1st April 2014.
Net Interest
Finance cost at Rs. 1,358 crore
was lower by Rs. 179 crore primarily
due to debt refinancing at a lower cost. However, sequentially, the
increase in borrowings to fund projects and temporary working
capital requirements resulted in a marginal increase in finance
costs.
Other income at Rs.893 crore
decreased by Rs.317 crore due to
timing differences where income earned on certain investments are
recognised at maturity due to partial adoption of AS 30. The other
income was exceptionally low in Q4 FY2015 on account of the same
reason.
Non-Operational Forex Loss/Gain
During the quarter, rupee depreciation of 1.9% led to a forex
gain of Rs. 255 crore on dollar
denominated investments, advances and trade debtors. The
corresponding quarter of Q1 FY2015 reflected a similar movement in
the exchange rate.
Taxation
Tax charge in the current quarter of Rs
352 crore (tax rate 17%), compared with Rs. 362 crore in Q1 FY2015 (tax rate 11% excluding
exceptional item), is higher following change in profitability mix.
Q4 FY2015 tax at Rs. 620 crore (tax
rate 35%) was higher primarily driven by higher deferred tax
recognised on significant exploration & development spend in
the oil and gas business.
Attributable Profit After Tax and
Earnings Per Share (EPS)
As a result of lower EBITDA partially offset by lower finance
cost, forex gain and lower depreciation and amortization,
attributable PAT at Rs. 866
crore was 35% lower in Q1 FY 2016 as compared to
Rs.1,341
crore(before exceptional items) in Q1 FY 2015.
Attributable
EPS for the quarter was Rs. 2.92 per share as compared to Rs.
1.27 per share in Q1 FY 2015. Excluding exceptional items,
attributable EPS was at Rs. 4.52 per share in Q1 FY 2015.
Exceptional items of Rs. 2,128
crore (gross of tax) for Q1 FY2015 pertain to change in
method of depreciation at Cairn India for the period up to
31st March 2014.
Borrowings and Investments
Gross debt increased by Rs. 1,778
crore to Rs. 79,530 crore, on
account of funding project payments and temporary working capital
requirements. Debt levels are expected to reduce as working capital
is repaid in Q2 FY2016.
Out of the total debt of Rs. 79,530
crore, debt in INR currency is Rs. 38,616 crore and balance Rs. 40,914 crore is in US dollar. Further, the gross
debt comprises of long term loans of Rs. 64,825 crore and short term working capital loans
of Rs. 14,705 crore. Average cost of
borrowing was 7.9%.
We continue to have a strong balance sheet with cash and liquid
investments of Rs. 47,091 crore as on
June 30, 2015 which is mostly
invested in debt related mutual funds, bank deposits and bonds.
The company has a long term rating of AA+ (negative) from
CRISIL.
Further, of the Rs. 11,350 crore
due in FY2016, Rs. 2,700 crore has
already been tied up and the balance is to be rolled over or
refinanced through long term debt. The Company is evaluating
different structures and options for future maturities with an
objective to lower funding cost and/or extend maturity profile.
Corporate
Merger of Vedanta Limited and Cairn India
During the quarter, the Company announced the Board approved
merger of its subsidiary Cairn India Limited with itself.
Minority shareholders of Cairn India will receive one equity share
in Vedanta Limited and 1 redeemable preference share
in Vedanta Limited with a face value of INR 10 for each
equity share held. No shares will be issued to Vedanta
Limited or any of its subsidiaries for their shareholding in
Cairn India. Following completion of the transaction,
Cairn India minority shareholders will own 20.2%
and Vedanta Limited minority shareholders will own a
29.7% stake in the enlarged entity. The Transaction is conditional
on Vedanta Limited and Cairn India shareholder approvals,
as well as Indian High Court, stock exchange and customary
approvals. The transaction is expected to be completed by Q1
CY2016.
Renewable Purchase Obligation (RPO)
Renewable Purchase Obligation was introduced in 2010 by the
various State Electricity Regulation Commissions, making it
mandatory for distribution companies, open access consumers and
captive power producers to meet at least 5% of their total annual
consumption of energy through renewable energy sources. The
Regulations were finally appealed in the Supreme Court, and the
Apex court vide its order dated 13 May
2015, has upheld the validity of RPO Regulations including
on captive power producers. A provision of Rs 414 crore has been made for the previous years
(FY2013 to FY2015) for the Aluminium, Zinc India and Copper -
India businesses on account of
RPO. At current capacities, RPO will be a recurring cost of
approximately Rs. 36 crore per
quarter across our Aluminium, Zinc India and Copper - India businesses.
Annexure
Debt and Cash
(in Rs. Crore)
-
Company 30 June 2015 31 March 2015
Debt Cash & LI Net Debt Debt Cash & LI Net Debt
Ved Ltd Standalone 40,164 1,263 38,901 37,636 840 36,796
Zinc India - 27,519 (27,519) - 27,192 (27,192)
Zinc International - 1,076 (1,076) - 857 (857)
Cairn India 388 17,027 (16,639) - 17,040 (17,040)
BALCO 5,767 65 5,702 5,456 2 5,454
Talwandi Sabo 6,729 12 6,717 6,541 152 6,389
Cairn acquisition SPV
(1) 25,490 1 25,489 26,850 54 26,796
Others squared 992 128 864 1,269 75 1,194
Ved Ltd Consolidated 79,530 47,091 32,439 77,752 46,212 31,540
1. As on 30 June 2015, debt at Cairn
acquisition SPV comprises Rs. 8,926 crore of
bank debt and Rs. 16,564 crore of
inter-company debt from Vedanta Resources Plc. The
accrued interest of Rs. 405
crore on the inter-company.
2. Others includes CMT, VGCB, Fujairah Gold, and Sesa
Sterlite investment companies.
Debt Maturity Profile
(in Rs. Crore)
FY 2021
Particulars (1) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 & Later Total
Sesa Sterlite
Standalone 5,770 3,289 6,512 6,654 2,112 3,104 27,441
Sesa Sterlite
Subsidiaries 5,580 3,617 3,706 4,058 1,387 2,472 20,820
Total 11,350 6,906 10,218 10,712 3,499 5,576 48,261
1. Maturity profile excludes working capital
facilities of Rs.14,705 crore and inter-company loan from Vedanta
Resources Plc
Debt numbers in the tables above are at book value
Note: Figures in previous periods have been
regrouped or restated, wherever necessary to make them comparable
to current period.
Results Conference Call
Please note that the results presentation is available in the
Investor Relations section of the company website
http://www.vedantalimited.com
Following the announcement, there will be a conference call at
6:00 PM (IST) on Wednesday,
29 July 2015, where senior management
will discuss the company's results and performance. The dial-in
numbers for the call are as below:
Event
Telephone Number
Earnings Mumbai main access
conference India - 6:00 PM (IST) +91 22 3938 1017
call
on 29 Mumbai standby access
July +91 22 6746 8333
2015
Toll free number
Singapore - 8:30 PM (Singapore Time) 800 101 2045
Toll free number
Hong Kong - 8:30 PM (Hong Kong Time) 800 964 448
Toll free number
UK - 1:30 PM (UK Time) 0 808 101 1573
Toll free number
US - 8:30 AM (Eastern Time) 1 866 746 2133
For
online
registra http://services.choruscall.in/diamondpass/registration?confirmationNumber=5267
tion 915
Replay Mumbai
of Conference +91 22 3065 2322
Call +91 22 6181 3322
(29 July 2015 to 5 Aug 2015) Passcode: 63835#
About Vedanta Limited
Vedanta Limited (Vedanta Ltd) is a diversified natural resources
company, whose business primarily involves exploring and processing
minerals and oil & gas. The Company produces oil & gas,
zinc, lead, silver, copper, iron ore, aluminium and commercial
power and has a presence across India, South
Africa, Namibia,
Ireland, Australia, Liberia and Sri
Lanka.
Vedanta Ltd, formerly Sesa Sterlite Limited, is the Indian
subsidiary of Vedanta Resources Plc, a London listed company. Sustainable Development
is at the core of Vedanta's strategy, with a strong focus on
health, safety and environment and on enhancing the lives of local
communities. Vedanta Ltd is listed on the Bombay Stock Exchange and
the National Stock Exchange in India and has ADRs listed on the New York
Stock Exchange. For more information, please visit
http://www.vedantalimited.com.
Vedanta Limited
(Formerly known as Sesa Sterlite Limited/Sesa Goa
Limited)
Vedanta, 75, Nehru Road,
Vile Parle (East), Mumbai - 400
099
http://www.vedantalimited.com
Registered Office:
Sesa Ghor, 20 EDC Complex,
Patto, Panaji (Goa) - 403
001
CIN: L13209GA1965PLC000044
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.
For further information, please contact:
Communications
Roma Balwani
President -
Group Communications, Sustainability & CSR
Tel: +91 22 6646 1000
gc@vedanta.co.in
Investor Relations
Ashwin Bajaj
Director -
Investor Relations
Sunila Martis
Manager -
Investor Relations
Tel: +91 22 6646 1531
vedantaltd.ir@vedanta.co.in