30th Jan 2008 07:00
Vedanta Resources PLC30 January 2008 Vedanta Resources Plc Unaudited Results for the Third Quarter and Nine Months Ended 31 December 2007 Highlights • Revenues for the quarter ("Q3") and nine months ended ("nine months period") ended 31 December 2007 was $1,888.2 million and $5776.1 million, up 7% and 21% respectively as compared with the corresponding prior period• EBITDA for the nine months period crosses the $2 billion mark on the back of volume growth, operating efficiencies and the acquisition of Sesa Goa, offset by the sharp appreciation of the Indian rupee and the decline in the LME prices of zinc and aluminium• Highest ever quarterly zinc production• Production across all the metals generally higher than that in the corresponding prior quarter• Chanderiya II smelter commissioned three months ahead of schedule• Stable cost of production ("COP"), despite increases in energy and related costs. Aluminium Aluminium production in Q3 at 99,000 tonnes was consistent with trends in thecorresponding prior quarter and the rated capacity. Despite higher sales volumes, revenues for Q3 were marginally lower at $261.9million as compared with $279.7 million in the corresponding prior quarter dueto lower LME prices of aluminium by 10% and the sharp appreciation of the Indianrupee against the US dollar by 12%. EBITDA for Q3 was at $73.4 million ascompared with $128.8 million in the corresponding prior quarter. While COP wasstable in INR terms, EBITDA was also adversely impacted by the aforesaidreasons. The first stream of the Lanjigarh alumina refinery has stabilised and produced115,000 tonnes of calcined alumina during Q3. The second stream of the Lanjigarhrefinery has now been tested. With regard to the environmental clearances for the Lanjigarh bauxite mines, weare now progressing as per the directions provided by the Honourable SupremeCourt of India and are hopeful of a positive resolution of the matter soon. Work on the first phase of the 500,000 tpa aluminium smelter and the associatedcaptive power plant at Jharsuguda, Orissa is progressing well. Equipmentdeliveries are progressing as per schedule and the plant erection work hascommenced. Phase 1 of this project comprising a 250,000 tpa smelter and theassociated captive power plant is on track for commissioning with first metalout by mid-2008, one year ahead of schedule. Copper - India and Australia During Q3, the copper cathode production at the Tuticorin custom smelter at77,000 tonnes was lower than our expectations, on account of unscheduled plantmaintenance. Overall the plant performance was good, with copper recoverieshighest ever, during Q3. This alongwith better by-product management contributedto significantly lower cost of production. Mined metal production at our Australian mines was in line with our expectationat 7,000 tonnes in Q3. Revenues for Q3 were lower at $669.4 million as compared with $717.5 million inthe corresponding prior quarter. The decrease in revenues was primarily onaccount of lower volumes and the sharp appreciation of the Indian rupee againstthe US dollar by 12%. Despite TcRcs being at 50% of their prior levels, EBITDA during Q3 at $91.4million was generally in line with the corresponding prior quarter, as a resultof better operating efficiencies and other income. Copper - Zambia During Q3, KCM produced 38,000 tonnes of copper cathode as compared with35,000 tonnes in the corresponding prior quarter. Whilst, the tailings leachplant production system is fairly stabilised, the mining feed to smelter was20,000 tonnes in Q3. The various improvement initiatives being undertaken arelikely to improve the mining performance and thereby also the operating costgoing forward. Revenues for Q3 were $232.1 million as compared with $211.4 million in thecorresponding prior quarter. EBITDA for Q3 was lower at $52.8 million ascompared with $79.4 million in the corresponding prior quarter mainly on accountof higher cost of production. Work on the Konkola Deeps mine expansion project is progressing well with thesinking of the main hoisting shaft and other auxiliary shafts on schedule. Workat the Nchanga smelter expansion project remains on track with major equipmentdelivered on site and erection activities progressing in line with our schedule. Zinc HZL recorded its highest ever quarterly production in Q3 for both zinc and lead.It produced 104,000 tonnes of zinc and 14,500 tonnes of lead, an increase of 12%and 21% respectively as compared with the corresponding prior quarter. The minedmetal production was 135,000 tonnes in Q3 as compared with 128,000 tonnes in the corresponding prior quarter. The Chanderiya II new hydro zinc smelter was commissioned in December 2007,three months ahead of its schedule. The ramp up of production is developing inan excellent manner and we expect to achieve rated production much ahead ofschedule. Sales during Q3 were augmented by the sale of 72,000 dry metric tonnes ofsurplus zinc and lead concentrate. Revenues in Q3 were $424.5 million as compared with $549.6 million in thecorresponding prior quarter. EBITDA for Q3 was $276.8 million as compared with$425.2 million in the corresponding prior quarter. Whilst sales volume werehigher and the overall cost of production was stable in INR terms, the revenuesand EBITDA were affected primarily on account of lower metal prices and thesharp appreciation of the Indian rupee against the US dollar. Average zinc LMEfor Q3 was $2,646 per tonne, a decrease of 37% as compared with $4,194 in thecorresponding prior quarter. The Indian rupee appreciated by 12% during thequarter as compared with the corresponding prior quarter. The work on the 88,000 tonne debottlenecking project and the associated captivepower plant is progressing well and is on schedule for commissioning bymid-2008. Iron Ore For the nine months period, the shipment of iron ore was 4.0 million tonnes, ascompared with 3.1 million tonnes in the corresponding prior period, taking thetotal shipment of iron ore to 7.4 million tonnes in the year to date. Revenues for Q3 and the post acquisition period of eight months were $303.5million and $464.9 million respectively, with the corresponding EBITDA at $182.2million and $260.3 million. The revenues and EBITDA were higher as comparedwith the immediately preceding quarter due to higher sales volumes and improved sales realisation. Commercial Energy Work on our 2400 MW (4x600 MW) coal based independent thermal power plant isprogressing well. The EPC contract has been placed and engineering andprocurement activities are on track. The construction activities are in fullswing and the project is on schedule. As part of our green energy initiative, we have commissioned 68.8 MW wind powerplants as of December 2007 and we expect to take this to 124 MW by March 2008. Production Summary (Unaudited) (in '000 tonnes, except as stated)-------------------------------------------------------------------------------- Q3(1) Nine Months(1) 2007-08 2006-07 Change 2007-08 2006-07 Change Alumina Korba / Mettur 68 69 (1.4%) 213 220 (3.2%) Lanjigarh 115 - - 143 - -Aluminium 99 98 1.0% 295 253 16.6%Copper India / Australia Mined metal content 7 7 - 22 22 - Cathodes 77 86 (10.5%) 249 224 11.2% Rods 55 41 34.1% 162 127 27.6%Copper Zambia Mined metal content 20 21 (4.8%) 61 65 (6.2%) Cathodes 38 35 8.6% 117 105 11.4%Zinc Mined metal content 135 128 5.5% 413 384 7.6% Refined metal 104 93 11.8% 291 253 15.0%Iron Ore(2) Saleable ore(3) 2,999 - - 6,781 - ---------------------------------------------------------------------------------(1) Q3 - third quarter ended 31 December 2007 and 2006, respectively, Nine Months - Nine month period ended 31 December 2007 and 2006, respectively(2) Nine month number represents production in post acquisition period of 8 months to 31 December 2007, and are not directly comparable with the corresponding prior periods(3) Saleable ore is reported on wet tonnes basis Financial Summary (Unaudited) (in $ million, except as stated)-------------------------------------------------------------------------------- Q3(1) Nine Months(1)Revenue 2007-08 2006-07 Change 2007-08 2006-07 Change Aluminium 261.9 279.7 (6.4%) 828.6 675.9 22.6%CopperCopper - India/Australia 669.4 717.5 (6.7%) 2,280.5 1,907.7 19.5%Copper Zambia 232.1 211.4 9.8% 812.1 699.6 16.1%Zinc 424.5 549.6 (22.8%) 1,388.8 1,431.1 (3.0%)Iron Ore(2) 303.5 - - 464.9 - -Others (3.2) 2.2 - 1.2 50.6 -Total 1,888.2 1,760.4 7.3% 5,776.1 4,764.9 21.2% EBITDAAluminium 73.4 128.8 (43.0%) 265.8 265.2 0.2%CopperCopper -India/Australia 91.4 92.4 (1.1%) 236.4 304.1 (22.3%)Copper Zambia 52.8 79.4 (33.5%) 264.7 323.8 (18.3%)Zinc 276.8 425.2 (34.9%) 1,017.2 1,128.7 (9.9%)Iron Ore(2) 182.2 - - 260.3 - -Others (5.1) (1.5) - (8.3) (7.0) -Total 671.5 724.3 (7.3%) 2,036.1 2,014.8 1.1%-------------------------------------------------------------------------------- (1) Q3 - third quarter ended 31 December 2007 and 2006, respectively, Nine Months - Nine month period ended 31 December 2007 and 2006, respectively(2) Nine month numbers represents revenues and EBITDA for post acquisition period of 8 months to 31 December 2007, and are not directly comparable with the corresponding prior periods For further information, please contact:Sumanth Cidambi [email protected] Director - Investor Relations Tel: +44 20 7659 4732 / Vedanta Resources plc +91 22 6646 1531 Faeth Birch Tel: +44 20 7251 3801Robin WalkerFinsbury About Vedanta Resources plcVedanta Resources plc is a London listed FTSE 100 diversified metals and mininggroup. Its principal operations are located throughout India, with furtheroperations in Zambia and Australia. The major metals produced are aluminium,copper, zinc, lead and iron ore. For further information, please visitwww.vedantaresources.com. DisclaimerThis 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:
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