Sesa Sterlite Limited: HZL Announces Results for the Third Quarter Ended 31 December 2013

MUMBAI, India, January 17, 2014 /PRNewswire/ --

The following release was issued today by Sesa Sterlite Limited's subsidiary Hindustan Zinc Limited.

 Hindustan Zinc Limited

Results for the Third Quarter Ended 31 December 2013

"Record integrated zinc metal production; EBITDA up 21%"

Highlights for the quarter

Operational Performance

• Integrated saleable zinc metal production - up 17%
• Integrated saleable lead and silver metal production - up 21% and 35% respectively

     (Logo: http://photos.prnewswire.com/prnh/20140117/663814 )

Financial Performance

• EBITDA up 21% to Rs 1,828 crore
• PAT up 7% to Rs 1,723 crore

Mumbai: Hindustan Zinc Limited ("HZL" or the "Company") today announced its results for the third quarter ended 31 December 2013.

Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) -"The emerging global demand-supply dynamics is leading to a consistent deficit scenario as anticipated. We remain focused on driving growth while maintaining our cost leadership."

Financial Summary

(In Rs Crore, except as stated)

                                                           Nine Months Ended
    Particulars                       Q3            Q2     December 31, 2013
                              2014   2013  Change  2014    2014   2013  Change
    Net Sales/

    Income from Operations
    Zinc                     2,650  1,975    34%    2,570  7,206  5,634   28%
    Lead                       352    371    -5%      453  1,207  1,054   15%
    Silver                     332    645   -49%      388  1,128  1,482  -24%
    Others                      76    149   -49%      110    329    505  -35%
    Total                    3,410  3,140     9%    3,521  9,870  8,675   14%

    EBITDA                   1,828  1,506    21%    1,904  5,238  4,419   19%
    Profit After Taxes       1,723  1,613     7%    1,640  5,023  4,734    6%
    Earnings per Share (Rs)   4.08   3.82     7%     3.88  11.89  11.20    6%

    Mined Metal Production
    ('000 MT)                  220    233    -5%      222    680    610   11%
    Refined Metal Production

    ('000 MT)
    Total Refined Zinc         196    171    15%     196     567    495   14%
    - Refined Zinc -
    Integrated                 196    168    17%     195     564    479   18%
    Total Refined Lead[1]       25     30   -17%      30      86     85    1%
    - Refined Lead -
    Integrated                  25     21    21%      29      81     70   16%
    Total Refined Saleable
    Silver[2],[3]

    (in MT)                     73    108   -33%      90     259    266   -3%
    - Refined Saleable
    Silver -Integrated          72     54    35%      83     233    197   18%
    Wind Power (in million
    units)                      59     62    -5%     151     372    432  -14%

    Zinc CoP without Royalty
    (Rs / MT)               52,014 44,926    16%  50,522  49,727 45,730    9%
    Zinc CoP without Royalty
    ( $ / MT)                  840    829     1%     816     828    838   -1%

    Zinc LME ($ / MT)        1,907  1,947    -2%   1,859   1,869  1,920   -3%
    Lead LME ($ / MT)        2,111  2,199    -4%   2,102   2,088  2,051    2%
    Silver LBMA ($ / oz.)     20.8   32.7   -36%    21.4    21.7   30.7  -29%
    USD-INR                   62.0   54.1    15%    62.1    60.1   54.5   10%

(1)  Excluding captive consumption of 1,927 MT in Q3 and 5,271 MT in nine months, as compared with 1,647 MT and 4,723 MT respectively in corresponding prior periods.

(2)  Excluding captive consumption of 10.1 MT in Q3 and 27.9 MT in nine months, as compared with 8.4 MT and 24.6 MT in corresponding prior periods.

(3)  Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes.

Operational Performance

Mined metal production was 220,126 MT in Q3, as compared with 232,926 MT a year ago. For the nine month period, our mined metal production was 679,597 MT as compared to 610,059 MT in the corresponding prior period. This is the highest ever mined metal production for the nine month period and was driven by higher production at Rampura Agucha and Zawar mines.

Integrated refined zinc production was up 17% to 196,478 MT in Q3 and up 18% to 564,292 MT in the nine month period compared to corresponding prior periods. The increase was due to improved operational efficiencies at our smelters. Production of integrated refined lead was up by 21% and 16% to 24,984 MT in Q3 and 81,429 MT in the nine month period respectively compared to previous year due to improved utilization of smelter capacity. Integrated saleable silver production was up 35% y-o-y to 72 MT in Q2 and 18% y-o-y to 233 MT in the nine month period.

We expect mined metal production of ~900,000 MT in FY 2014 reflecting slower than expected ramp up of underground mining projects and some change in mining sequence wherein preference has been given to primary mine development during this period. Integrated saleable silver production is projected to be in the range of 290 - 300 MT in FY 2014.

Financial Performance

Revenues were up 9% to Rs. 3,410 crore in Q3 and 14% to Rs. 9,870 crore in the nine month period, as compared with the corresponding prior periods. The increase was driven by higher zinc sales volume and rupee depreciation, partially offset by lower silver and acid prices.

EBITDA increased by 21% to Rs 1,828 crore in Q3, and was 19% higher at Rs. 5,238 crore in the nine month period from a year ago. The increase was driven by higher integrated sales volume and rupee depreciation, partially offset by lower silver price and higher costs in rupee terms.

Net profit was up 7% to Rs. 1,723 crore in Q3 and 6% to Rs. 5,023 crore in the nine month period as compared to previous year. The positive impact of higher EBITDA was partly offset by lower other income and higher tax during the quarter.

The zinc metal cost of production before royalty during the quarter was Rs. 52,014 ($840), 16% higher in Rupee and 1% higher in USD terms from a year ago. The increase in rupee costs was primarily due to lower by-product sulphuric acid prices, higher diesel costs and rupee depreciation, partly offset by higher volumes and operational efficiencies.

Expansion Projects

Mine development is progressing well at all our underground projects. Kayad mine has become operational during the quarter. Our project capex will be in line with our guidance of $ 250 Million per year.

Liquidity and investment

As on 31 December 2013, the Company had cash and cash equivalents of Rs. 24,095 crore, out of which Rs. 19,111 crore was invested in debt mutual funds, Rs. 1,972 crore in bonds and Rs 3,000 crore were in fixed deposits with banks. The Company follows a conservative investment policy and invests in high quality debt instruments.

About Sesa Sterlite Limited

Sesa Sterlite Limited ("Sesa Sterlite") is one of the world's largest diversified natural resource companies. Our business primarily involves exploring, extracting and processing minerals and oil & gas. We produce oil & gas, zinc, lead, silver, copper, iron ore, aluminium and commercial power and have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and Sri Lanka. Sesa Sterlite has a strong position in emerging markets with over 80% of its revenues from India, China, East Asia, Africa and the Middle East.

Sustainability is at the core of Sesa Sterlite's strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.

Sesa Sterlite is a subsidiary of Vedanta Resources Plc, a London listed company. Sesa Sterlite is listed on the Bombay Stock Exchange and the National Stock Exchange in India and has ADRs listed on the New York Stock Exchange.

Registered Address: Sesa Sterlite Limited, Sesa Ghor, 20 EDC Complex, Patto, Panjim, Goa - India - 403 001

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:

Ashwin Bajaj
Senior Vice President - Investor Relations
Tel: +91-22-6646-1531
[email protected]

SOURCE Sesa Sterlite Limited