26th Jul 2007 07:01
Vedanta Resources PLC26 July 2007 26 July 2007 Vedanta Resources Plc Unaudited Results for the First Quarter Ended 30 June 2007 Highlights • Revenue of $1.85 billion against $1.3 billion in corresponding prior quarter • EBITDA of $695 million against $589 million in corresponding prior year • Highest ever quarterly mined metal production at HZL • Consistent achievement of rated capacity for third consecutive quarter at the new Korba smelter • Acquired 51% stake in Sesa Goa Limited, India's largest private sector iron ore producer - exporter • Sterlite Industries (India) Limited lists on NYSE, raised US$2 billion in ADS Offering • Lanjigarh alumina refinery at pre-commissioning stage, commenced production of hydrate alumina Performance Summary For the quarter ended 30 June 2007 ("Q1"), revenues and EBITDA were $1,850.3million and $695.4 million respectively, including Sesa Goa, an increase of 18% compared to the corresponding prior period. The increase was primarily on account of higher volumes and better price realisations. Production across all metals in India was significantly higher than thecorresponding prior quarter mainly because of contribution from the newlycommissioned projects. Aluminium For the quarter, aluminium production was 97,000 tonnes, higher than the ratedcapacity and consistent with the production trends of the last two quarters. Thenew Korba smelter produced over 62,000 tonnes of hot metal during the quarterand has consistently performed at these levels for three consecutive quarters. Q1 revenues and EBITDA were $281.8 million and $110.2 million. Sales volumeswere largely in line with production volume during the quarter and the costs toowere largely stable. The increase in revenues and EBITDA, as compared to thecorresponding prior quarter, was primarily on account of higher volumes from thenew Korba smelter and better LME prices partially offset by appreciation of theIndian Rupee against the US dollar. Our operating costs have been stable. Globalalumina prices have seen an upward trend in the first quarter of the currentfiscal which has impacted our costs. BALCO was recently awarded the coveted President of India's Nirmal Gram Awardfor its sanitation project in Korba by the Ministry of Rural Development,Government of India. Copper - India and Australia Copper cathode production at our Tuticorin plant in the quarter at 81,000 tonnesis comparable with the preceding quarter except for the effect of the plannedmaintenance shutdown in April 2007. Q1 revenues were $748.1 million as compared with $472.7 million in thecorresponding prior quarter, primarily due to higher volumes and higher metalprices. For the same period, EBITDA was $71.6 million compared with$115.2 million in the corresponding prior quarter, a decrease of 38% primarilydue to lower TCRC realisation and lower despatches from our captive mines.EBITDA for the quarter is higher than the preceding quarter despite lower TC/RC,mainly due to better performance of our phosphoric acid business and betterby-product management. Our costs are showing an improving trend. In line with the current market trend, we expect TCRC to further soften and thefull year TCRC is expected to be half the level of last fiscal year. Sterlite was recently awarded the 'Excellent Energy Efficient Unit' award by theConfederation of Indian Industry. Copper - Zambia During the current quarter, KCM produced 39,000 tonnes of copper cathode,marginally higher than the preceding quarter and at the same level as thecorresponding prior quarter. This has been achieved despite low equipmentavailability consequent to planned partial plant shutdown for major overhaulingof Nkana smelter in April 2007. Cathode production from the smelter was around23,000 tonnes. The production from the tailings leach plant improvedsignificantly and was at 16,000 tonnes for the quarter. Q1 revenues were $274.7 million as compared with $253.1 million in thecorresponding prior quarter primarily due to higher volumes. Q1 EBITDA was$106.2 million as compared with $126.0 million in the corresponding priorquarter. The decrease was primarily due to higher cost of production in thecurrent quarter and lower price realisation as compared to corresponding priorquarter. The unit cost has shown a marginal reduction this quarter as comparedto preceding quarter primarily on account of increased production. Zinc The mined metal production at 134,000 tonnes during the quarter is the highestever production in a quarter. During the same period refined zinc production was93,000 tonnes. Sales during the current quarter were augmented by sales of about 50,000 drymetric tonnes of zinc concentrate and about 5,000 dry metric tonnes of leadconcentrate. Q1 revenues were $476.3 million as compared with $353.6 million inthe corresponding prior quarter and EBITDA was at $385.8 million over $279.4million in corresponding prior quarter, an increase of 38%, both due to increasein volumes and better LME partially offset by appreciation of Indian Rupeeagainst US dollar. Operating costs have been largely stable except for someincrease in power costs. HZL recently received the following awards: • TERI 'Corporate Social Responsibility' award for HZL's sustainable initiatives • FICCI, SEDF corporate social responsibility commendation award Projects Update Aluminium The Alumina refinery at Lanjigarh is designed to produce 1.4 million TPA ofcalcined alumina, through two streams, each producing 0.7 million tonnes, andcaptive power plant. Presently, the first stream of alumina refinery iscommissioned with outsourced bauxite. Alumina is scheduled for dispatch duringlast week of July 2007. As regards the environmental clearances for developingthe Lanjigarh bauxite deposits, the matter is scheduled for hearing by theSupreme Court during August 2007 and we are hopeful of a positive resolution inthe matter. Work on the first phase of the green-field 500,000 tpa aluminium smelter andassociated 1,215 MW captive power plant in Jharsuguda, Orissa, is progressing well. Civilconstruction of the pot rooms and other associated plants is progressing well. Over 100 pots have already been installed. Equipment deliveries are also on track. Overall project is on schedule and on budget for commissioning of the first phase of 250,000 tpa and associated captive power plant for second half of CY 2009 and the second phase by end of CY 2010. Commercial Energy Work on the 2,400 MW (4X600 MW) coal based Independent thermal power plant hascommenced. An EPC contract has been released and the work is in full swing.Overall the project is on schedule for progressive commissioning from late 2009as announced. Copper Work on the KDMP expansion project to increase the copper ore output fromKonkola mine to 6 million tpa is progressing well. All the major areas such as new shaft, ventilation shaft, pipe shaft and concentrator are on track with main shaft having already reached a depth of 90 meters. Further work at the Nchanga smelter expansion project, which will add copper capacity of 250,000 tpa is progressing well. The foundation of the flash furnace, ESP and the sulphuricacid plant are complete and equipment deliveries have commenced. Zinc All orders have been placed for the Phase II 170,000 tpa Chanderiya expansionproject and construction activity at the site is in full swing. The roasterplant, which is the first stage of the smelting process, has been completed andput under operation. The leaching and purification plant and the cell houseplant are also on track. Similarly work on the captive power plant and at theAgucha concentrator, to raise the milling capacity to 5.0 million tpa, isprogressing well. The progress on the overall project is good and as advisedearlier, Chanderiya smelter is expected to be ready by December 2007, about 3months ahead of our earlier schedule of early 2008. In pursuit of our vision to generate 10% of our energy requirement through greenenergy, we have placed a turnkey contract for 148.8MW of which the first of 38.4MW has been successfully commissioned ahead of schedule during March 2007 while the work on the balanceis on as per schedule for progressive commissioning by March 2008. Production Summary (Unaudited) ('000 tonnes, except as stated) Q1(1) Q4(1) Full Year 2007-08 2006-07 Change 2006-07 2006-07Alumina 72 73 (1.4%) 80 299Aluminium 97 76 27.6% 98 351Copper India/AustraliaCopper-mined metal content 6 8 (25.0%) 6 28Copper-Cathode 81 57 42.1% 89 313Copper-Rod 51 40 27.5% 51 178Copper-ZambiaCopper-mined metal content 20 18 11.1% 19 84Copper-Cathode 39 39 - 37 142ZincZinc-mined metal content 134 131 2.3% 121 505Zinc-refined 93 82 13.4% 95 348Iron Ore(2)Saleable Ore(3) 1,934 - - - -Pig Iron 43 - - - -Equivalent Gold(oz) 1,712 - - 1,923 17,662 (1). Q1 - First quarter ended 30 June 2007 and 2006, respectively, Q4 - Fourth quarter ended 31 March 2007 and 2006 respectively (2). Represents production in post acquisition period of 2 months to 30 June 2007, and are not directly comparable with the corresponding prior periods (3). Iron ore is reported on wet tonnes basis Financial Summary (Unaudited) (in $ million, except as stated) Q1 % Q4 Full YearRevenue 2007-08 2006-07 Change 2006-07 2006-07Aluminium 281.8 157.8 78.6% 317.5 993.4Copper- India/Australia 748.1 472.7 58.3% 645.7 2,553.4- Zambia 274.7 253.1 8.5% 316.3 1,051.9Zinc 476.3 353.6 34.7% 457.0 1,881.1Iron ore 68.3 - - - -Others 1.1 48.3 - 0.8 51.4Total 1,850.3 1,285.5 43.9% 1,737.3 6,502.2 EBITDAAluminium 110.2 66.1 66.7% 150.2 415.4Copper- India/Australia 71.6 115.2 (37.8%) 61.5 365.6- Zambia 106.2 126.0 (15.7%) 144.5 468.3Zinc 385.8 279.4 38.1% 325.2 1,453.9Iron ore 27.3 - - - -Others (5.7) 2.4 - 6.8 (0.2)Total 695.4 589.1 18.0% 688.2 2,703.0 For further information, please contact: Sumanth Cidambi [email protected] Associate Director - Investor Tel: +44 20 7659 4732 / +91 22 6646 1531Relations Vedanta Resources plc James Murgatroyd Tel: +44 20 7251 3801Robin WalkerFinsbury About Vedanta Resources plc Vedanta Resources plc is a London listed diversified metals and mining group.Its principal operations are located throughout India, with further operationsin Zambia, Australia and Armenia. The major metals produced are aluminium,copper, zinc, lead, iron ore and gold. For further information, please visitwww.vedantaresources.com Disclaimer This press release contains "forward-looking statements" - that is, statementsrelated to future, not past, events. In this context, forward-looking statementsoften address our expected future business and financial performance, and oftencontain words such as "expects," "anticipates," "intends," "plans," "believes,""seeks," "should" or "will." Forward-looking statements by their nature addressmatters that are, to different degrees, uncertain. For us, uncertainties arisefrom the behaviour of financial and metals markets including the London MetalExchange, fluctuations in interest and or exchange rates and metal prices; fromfuture integration of acquired businesses; and from numerous other matters ofnational, regional and global scale, including those of a political, economic,business, competitive or regulatory nature. These uncertainties may cause ouractual future results to be materially different that those expressed in ourforward-looking statements. We do not undertake to update our forward-lookingstatements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Vedanta Resources