28th Jul 2005 12:00
Vedanta Resources PLC28 July 2005 28th July 2005 Vedanta Resources plc Results for the 1st quarter ended 30 June 2005 Highlights •Group EBITDA almost doubled to US $155 million •Higher production volumes and EBITDA across all metals •Zinc and copper expansions ramping up well with increased production this quarter •Expansions at Korba and Orissa remain on schedule Summary EBITDA increased to $155 million compared to $79 million for the first quarterof 2004, an increase of 97 % (an increase of 32 % excluding KCM). This stronggrowth has been driven by higher production and higher prices across all metals,which have more than offset tariff reductions and higher energy costs. Duringthis quarter our copper and zinc expansion projects were brought on stream andproduction is building at both. The 250,000 tpa Aluminium smelter project atKorba is on course for its completion in March 2006 and the first 72 pots out of288 will be fully online in August 2005. Anil Agarwal, Executive Chairman of Vedanta commented: "We are delivering increased production and are continuing to make good progresson our expansion pipeline. Vedanta continues with its established strategy ofgrowth in each of our core metals and our growth projects will createsubstantial additional value for shareholders. The long-term outlook for demandin India remains positive." For further information please contact: John Smelt, Head of Investor Relations Tel: +44 20 7659 4734Vedanta Resources plc +44 787 964 2675 James Murgatroyd Tel: +44 20 7251 3801Robin WalkerFinsbury Aluminium The existing plants at BALCO and MALCO continue to operate at full capacity.Production in the first quarter of the current financial year was higher thanthe corresponding quarter of the previous year as a result of productivityenhancement measures. Better metal prices and product mix have outweighed theimpact of higher energy and input costs, resulting in a 7% increase in EBITDA.Input costs have risen mainly as a consequence of our decision to improveavailability of coal by blending imported coal with domestic coal. The production of 36,000 tonnes during this quarter includes 2,000 tonnes frompots at the new Korba smelter. Since the commissioning of the first unit of thepower plant in June, pots have been progressively commissioned and the firstcluster of 72 pots is planned to be fully operational by Aug 2005. The phasedintroduction of the next three units of the power plant will enablecommissioning of all the 288 pots by the scheduled date of March 2006. The alumina refinery in Orissa is proceeding according to plan, with orders forall major packages placed with suppliers and the civil engineering andconstruction work progressing satisfactorily. We continue to address publicinterest submissions concerning the environmental clearances for the bauxitemining to a Supreme Court of India sub-committee. Copper - India & Australia The strong ramp up of the new 300,000 tpa smelter has increased production byabout 8,000 tonnes over the preceding quarter bringing total production to56,000 tonnes. The new furnace at Tuticorin has already achieved maximumthrough-put and the refinery ramp up is progressing well and will achieve fullcapacity in the second half of the financial year. The 60% increase in EBITDA of the copper business over the corresponding periodof the previous year has been driven by higher volumes, prices and TCRCs. Asexpected, TC/RC levels have improved considerably over both the correspondingquarter of the previous year and on the overall levels of last year. Thesepositive factors have more than offset the negative impact of tariff reductionssince July 2004. The Australian copper mines continue to benefit from better metal prices. Asplanned, operations at Thalanga Copper Mines are expected to close in the secondquarter of the current financial year. The estimated closure costs have beenfully provided for in the accounts. Copper - Zambia The various management actions initiated at KCM since the acquisition inNovember 2004 have started to yield results, with production of copper in thisquarter higher than the preceding quarter in spite of a planned shutdown at thesmelter. The improvements made during this shutdown, will further enhanceperformance. The new acid plant, due to be commissioned in November 2005, is onschedule and will also support the achievement of cost reduction targets. Sincethe end of the quarter industrial action lasting 8 days resulted in the loss ofaround 7,500 tonnes of production. Zinc There has been a substantial increase in the production of raw material for zincdue to the expansion of Rampura Agucha mine. Total production of zinc was 57,000tonnes in the quarter, an increase of 13% over the comparable period last year.The new 170,000 tpa smelter at Chanderiya was commissioned in May 2005 and rampup of production is progressing well, adding over 3,000 tonnes of zinc over thepreceding quarter. The EBITDA of the zinc business increased by 25% over the corresponding periodof the previous year. Higher metal prices and volumes have more than off set thenegative impact of tariff reductions and higher energy costs. While productionhas been strong, sales have lagged because of sluggish demand from the domesticsteel sector, which is expected to recover in the second half of the year. Financials: Financial Summary Q1 12 months(US$m) 2005-06 2004-05 % change 2004-05Turnover:Aluminium 73.3 61.2 19.8% 281.7Copper - India 234.4 148.6 57.7% 765.5Copper - Zambia(1) 154.2 - 249.2Zinc 120.9 93.8 28.9% 486.4Other 20.6 20.0 3.0% 101.4Total 603.4 323.6 86.5% 1884.2 EBITDA:Aluminium 17.7 16.5 7.3% 75.6Copper - India/Australia 33.2 20.7 60.4% 85.2Copper - Zambia(1) 49.8 - 76.0Zinc 53.1 42.4 25.2% 218.8Other 1.3 (0.8) (0.6)Total (existing) 155.1 78.8 96.8% 455.0 US$: INR average rates, 43.60 for 3 months ended 06/05 and an average of 44.96in 2004-05. Operations: Production summary Q1 12 months(mt, 000's) 2005-06 2004-5 % change 2004-05 Alumina 71 67 6.1% 279Aluminium 36 33 9.0% 136Copper - India/AustraliaMined metal content 10 11 -8.1% 36Copper - Cathode 56 34 64.0% 172Copper - Rods 39 26 46.3% 125Copper - Zambia(1)Mined metal content 25 - - 46Copper - Cathode 43 - - 68Zinc Metal content in concentrate 114 82 38.3% 355Refined Zinc 57 50 13.4% 212 (1)There is no comparative data for KCM as these were acquired in November 2004.The 12 month numbers includes data for the five months from November 2004 toMarch 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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