Sesa Sterlite Limited Consolidated Results for the Third Quarter and Nine Months Ended 31 December 2014
MUMBAI, January 29, 2015 /PRNewswire/ --
Attributable PAT* at Rs. 1,588 Crore
Sesa Sterlite Limited ("Sesa Sterlite" or the "Company") today announced its unaudited consolidated results for the third quarter (Q3) ended 31 December 2014.
(Logo: http://photos.prnewswire.com/prnh/20140117/663814)
Financial Highlights
- Q3 FY2015 Revenues at Rs. 19,128 crore
- EBITDA at Rs. 6,234 crore; EBITDA margin of 43%[1]
- Attributable PAT excluding exceptional items at Rs. 1,588 crore
- Gross debt reduced by Rs. 1,470 crore in 9 months
- Strong balance sheet with Cash & Cash equivalents of Rs. 47,000 crore
Operational Highlights
- Strong mined metal production at Zinc - India
- Gross daily average production of 219 kboepd at Oil & Gas; production at Rajasthan normalised following planned maintenance shutdown in Q2
- Strong operating performance at Aluminium and newly commissioned pot-lines ramping up
- Received approval to start the BALCO 1,200 MW power plant; trial runs to start in Q4
- First 660MW unit of 1,980 MW Talwandi Sabo Power Plant commenced commercial operations
- Iron Ore mining leases renewed at Goa and Karnataka
- Reviewing capex & opex plans across businesses to maximize cash flows in light of recent commodity price declines
Mr. Tom Albanese, Group CEO: "We have delivered sustained performance in the third quarter despite the challenging markets. Strong operating performance of Aluminium and Zinc businesses led to the reduction in gross debt by Rs. 400 crore. We are focused on disciplined capital allocation, coupled with deferred and phased development spending in Zinc, Oil & Gas and other businesses which will help optimize our assets and drive strong cash flow in the near future."
*Excluding exceptional items
[1]Excludes custom smelting at Zinc and Copper India operations
Consolidated Financial Performance
The Sesa Sterlite merger and the Vedanta Group consolidation was completed in August 2013, hence Q3 and nine months FY2015 performance is compared with the adjusted proforma numbers of respective periods, which are more representative of the performance during the period.
(In Rs. crore, except as stated)
FY2014
(Adjusted
Proforma) Q3 Q2 Nine months
FY 2014
FY 2014 FY 2015
FY2015 (Adjusted % FY2015 (Adjusted %
Particulars (Actual) Proforma) Change (Actual) Actual Proforma) Change
Net
Sales/Income
72,591 from operations 19,128 19,414 -1% 19,448 55,632 51,807 7%
25,603 EBITDA 6,234 6,565 -5% 6,336 18,240 18,937 -4%
EBITDA
47% margin[1] 43% 48% - 45% 45% 47% -
6,111 Finance cost 1,329 1,530 -13% 1,472 4,338 4,574 -5%
2,210 Other Income 429 390 10% 686 2,325 1,448 61%
505 Forex gain 393 82 - 260 795 535 67%
Profit before
Depreciation
21,937 and Taxes 5,639 5,432 4% 5,756 16,813 15,976 5%
5,584 Depreciation 1,782 1,415 26% 1,534 4,860 4,115 18%
Amortisation of
2,840 goodwill 546 678 -19% 469 1,536 1,916 -20%
Profit before
Exceptional
13,514 items 3,311 3,339 -1% 3,753 10,417 9,944 6%
Exceptional
167 Items[2] - - 45 1,673 - -
1,000 Taxes 478 -139 - 560 1,399 673 108%
Profit After
12,347 Taxes 2,834 3,478 -19% 3,148 7,345 9,271 -21%
Minority
7,342 Interest 1,246 1,698 -27% 1,528 3,763 5,490 -31%
Attributable
PAT after
exceptional
5,005 item 1,588 1,780 -11% 1,619 3,582 3,781 -5%
Attributable
PAT before
exceptional
5,172 item 1,588 1,780 -11% 1,640 4,569 3,781 21%
Basic Earnings
per Share
16.88 (Rs./share) 5.35 6.00 -11% 5.46 12.08 12.75 -5%
Basic Earnings
per Share
without
exceptional
items
17.44 (Rs./share) 5.35 6.00 -11% 5.53 15.41 12.75 21%
Exchange rate
(Rs./$) -
60.5 Average 62.0 62.0 - 60.6 60.8 60.1 1%
Exchange rate
(Rs./$) -
60.1 Closing 63.3 61.9 2% 61.6 63.3 61.9 2%
- Excludes custom smelting at Zinc and Copper India operations
- Exceptional items for the quarter is reflected net of tax
Revenue
Revenue in Q3 was at Rs 19,128 crore. Revenue for the quarter decreased marginally q-o-q by 2%,driven by the decline in oil prices (down ~25%) partly offset by higher oil production (up 13%); and weaker copper, zinc and lead and silver prices, mostly offset by higher production volumes of aluminium and zinc.
Revenue was marginally down by 1%(Rs. 300 crore) in the quarter as compared to Q3 FY 2014. It was driven by decline in prices: oil 29%, copper 7%, lead 5%, and silver 21%, whereas Zinc and Aluminium prices were stronger by 17% and 11% respectively. The premia in Aluminium and Zinc were higher as compared to corresponding prior period.
EBITDA and EBITDA Margin
EBITDA margin (excluding custom smelting) in Q3 was strong at 43% with EBITDA at Rs. 6,234 crore on the back of higher volumes and lower cost. The better operating performance and benefit of currency depreciation was more than offset by lower brent and commodity prices.
Depreciation and Amortisation
Depreciation was higher at Rs. 1,782 crore compared with Rs. 1,415 crore in Q3FY2014, and Rs. 1,534 crore in Q2 FY 2015. Most of the increase is due to higher depreciation charge in Cairn India on account of change in depreciation method from Straight Line Method (SLM) to Unit of Production (UOP) on tangible assets in line with Indian Company's Act requirement. Also, Capitalisation of one unit of Talwandi Sabo Power Limited (TSPL) and 84 pots at the Korba-II aluminium smelter, had impact on increase of depreciation in Q3 FY 2015.
During the quarter there was lower amortisation of goodwill by Rs. 132 crore due to lower charge by Rs. 100 crore in Lisheen at Zinc International as it was amortised in previous year at accelerated rate. Amortisation was lower at CMT as there was no production from the Australian mines. Sequentially, it is higher with better volume at Oil & Gas business.
Finance Cost
Foreign Currency Convertible bonds (FCCB) of US$717 million were repaid in the month of October through a combination of internal cash and refinancing leading to reduction in cost. Further, project loans in aluminium business were refinanced at lower interest rates in the first half of the year and started accruing benefits in finance cost during the quarter.
Non-Operational Forex Loss/Gain
In Q3, rupee depreciated by 2.8% and closed at Rs.63.3 on 31st December 2014. This resulted in higher forex gain in Cairn India on dollar denominated investments and debtors.
Tax
Tax rate in Q3 was 14.4% similar to that in Q2 FY 2015. However, it is higher than Q3 FY 2014, on account of one time deferred tax asset of Rs. 452 crore being created in the corresponding quarter of the earlier year. Excluding the deferred tax asset, the current tax rate is comparable to that of Q3 FY 2014.
Borrowings and Investments
Gross debt reduced by ~Rs. 1,470 crore to Rs. 79,096 crore as on 31 December 2014 which was at Rs. 80,566 crore as on 31 March 2014.
Out of total loan of Rs. 79,096 crore the loan in INR currency is Rs.35,219 crore and balance Rs. 43,877 crore is in US dollar. The short term loans maturing by March 2015 taken at lower interest rates have been largely used for project finance and with easing interest rate scenario, these will be refinanced and will be converted gradually to long term maturity.
Out of the company's cash, cash equivalents and liquid investments of Rs. 46,806 crore, Rs. 34,745 crore was invested in debt mutual funds, Rs. 7,895 crore in bonds, and Rs. 4,166 crore in bank deposits. Net debt was marginally lower at Rs. 32,290 crore.
The company continues to follow a conservative investment policy and invests in high quality debt instruments with the mutual funds, bonds and fixed deposits with banks.
The Company has its long-term rating at AA+/Negative from CRISIL.
Debt and Cash
(in Rs. Crore)
-
Company 31 December 2014 30 September 2014 Debt Cash & LI Net Debt Debt Cash & LI Net Debt Sesa Sterlite Standalone 38,480 693 37,787 40,187 3,143 37,044 Zinc India - 26,355 (26,355) - 25,412 (25,412) Zinc International - 1,398 (1,398) - 1,169 (1,169) Cairn India 158 18,079 (17,921) - 16,164 (16,164) BALCO 5,508 2 5,506 5,309 28 5,281 Talwandi Sabo 6,343 20 6,323 5,840 9 5,831 Cairn acquisition SPV (1) 27,145 116 27,029 26,979 1,021 25,958 Others squared 1,462 143 1,319 1,211 161 1,050 Sesa Sterlite Consolidated 79,096 46,806 32,290 79,526 47,107 32,419
- As on 31 December 2014, debt at Cairn acquisition SPV comprises Rs.10,766 crore of bank debt and Rs.16,378 crore of inter-company debt from Vedanta Resources Plc. The accrued interest of Rs 120 crore on inter-company debt as on 31 December 2014
- Others include MALCO Energy, CMT, VGCB, Sesa Resources, Fujairah Gold, and Sesa Sterlite investment companies.
Debt Maturity Profile
(in Rs. Crore)
FY 2019 &
Particulars (1) FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Later Total
Sesa Sterlite
Standalone 2,833 2,747 3,233 6,456 6,563 5,448 27,280
Sesa Sterlite
Subsidiaries 5,019 3,135 3,221 3,245 4,186 3,173 21,979
Total 7,852 5,882 6,454 9,701 10,749 8,621 49,259
¹Maturity profile excludes working capital facilities of Rs.13,457 crore.
Note: Debt numbers in the tables above are at book value. 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.sesasterlite.com
The results call will be at 6:00 PM (IST) on Thursday, 29 January 2015, where we will refer to the above mentioned presentation. The dial-in numbers for the call are:
Earnings conference call on 29 January 2015
India - 6:00 PM (IST)
Mumbai main access
+91 22 3938 1088
Mumbai standby access
+91 22 6746 8388
Singapore - 8:30 PM (Singapore Time)
Toll free number 800 101 2045
Hong Kong - 8:30 PM (Hong Kong Time)
Toll free number 800 964 448
UK - 12:30 PM (UK Time)
Toll free number 0 808 101 1573
US - 07:30 AM (Eastern Time)
Toll free number 1 866 746 2133
For online registration: http://services.choruscall.in/diamondpass/registration?confirmationNumber=8317984
Replay of Conference Call
(29 January 2015 to 8 February 2015)
Mumbai
+91 22 3065 2322
Passcode: 63835
For further information, please contact:
Communications
Roma Balwani
President - Group Communications, Sustainability & CSR
Tel: +91 22 6646 1000
Investor Relations
Ashwin Bajaj
Director - Investor Relations
Sheetal Khanduja
Associate General Manager - Investor Relations
Tel: +91 22 6646 1531
About Sesa Sterlite Limited (Formerly known as Sesa Goa Limited)
Sesa Sterlite Limited (SSLT) is one of the world's largest diversified natural resources companies, whose business primarily involves exploring and processing minerals and oil & gas. SSLT 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. Sustainability is at the core of SSLT's strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.
SSLT is a subsidiary of Vedanta Resources Plc, a London-listed company. SSLT is listed on the Bombay Stock Exchange and the National Stock Exchange in India and has ADRs listed on the New York Stock Exchange.
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.
SOURCE Sesa Sterlite Limited
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