MUMBAI, July 29, 2016 /PRNewswire/ --
Vedanta Limited (formerly known as Sesa Sterlite Ltd) today
announced its unaudited consolidated results under Ind AS for the
first quarter (Q1) ended 30 June
2016.
Robust EBITDA margins during the quarter
- Q1 FY2017 Revenues at Rs. 14,364
crore
- EBITDA of Rs. 3,543 crore with
strong EBITDA margin1of 32%
- Attributable net profit before exceptional items increased
significantly from a loss of Rs 62
crore in Q4 FY2016 to a profit of Rs. 615 crore
- Gross Debt reduced by Rs. 606
crore during the quarter
- Strong financial position with total cash & cash
equivalents of Rs. 52,299 crore
Aluminium, Power and Iron ore ramp-up progressing
well
- Aluminium: Commissioning of pots at BALCO-II and 1st line of
Jharsuguda-II smelter nearing completion, 2nd line ramp-up
commenced
- Aluminium: exit production run-rate of 1.1mtpa
- Iron ore: Production at Goa
ramped-up; produced 40% of allocated EC capacity in Q1
- Power: Third 660MW unit of TSPL synchronized, to be capitalized
in Q2; second 300MW IPP unit of BALCO capitalized
- Oil & Gas: Production stable; contribution from Mangala EOR
increased to 42kboepd, world's largest polymer EOR program
- Oil & Gas: Rajasthan water flood opex at $4.4/boe, blended cost at $6.4/boe
- Zinc India: Silver production
up 20% y-o-y; mined metal production of 127 kt as per mine plan,
with 2nd half to be substantially higher
1. Excludes
custom smelting at Copper India and Zinc India operations
Tom Albanese, Chief Executive
Officer, Vedanta Limited, said: "We have made good progress
on the ramp up of capacities at our Aluminium, Power and Iron Ore
businesses during the quarter. These would be significant
contributors to earnings as the year progresses. Zinc India was impacted by lower mined metal
production as per the mine plan, and the second half is expected to
be substantially higher. We are focused on generating stronger free
cash flow and delevering the balance sheet, in line with our
strategic priorities. Another of these priorities, the
simplification of the group structure, is also on track following
the recent announcement of the revised and final terms for the
Vedanta Ltd and Cairn India merger."
Consolidated
Financial Performance
|
The consolidated financial performance of the company under Ind
AS during the period is as under:
(In Rs. crore, except
as stated)
|
FY
2016
|
Particulars
|
Q1
|
Q4
|
Actual
|
FY
2017
|
FY
2016
|
%
Change
|
FY
2016
|
%
Change
|
63,913
|
Net Sales/Income from
operations
|
14,364
|
16,944
|
(15)%
|
15,826
|
(9)%
|
15,183
|
EBITDA
|
3,543
|
4,139
|
(14)%
|
3,480
|
2%
|
30%
|
EBITDA
Margin1
|
32%
|
32%
|
|
28%
|
|
5,782
|
Finance
cost
|
1,393
|
1,373
|
1%
|
1,566
|
(11)%
|
4,482
|
Other
Income
|
1,094
|
955
|
14%
|
1,251
|
(13)%
|
(23)
|
Forex loss/
(gain)
|
67
|
28
|
|
(16)
|
|
13,874
|
Profit before
Depreciation and Taxes
|
3,140
|
3,670
|
(14)%
|
3,200
|
(2)%
|
6,134
|
Depreciation
|
1,492
|
1,502
|
(1)%
|
1,423
|
5%
|
7,740
|
Profit before
Exceptional items
|
1,648
|
2,168
|
(24)%
|
1,777
|
(7)%
|
13,862
|
Exceptional
Items2
|
|
41
|
|
13,723
|
|
1,894
|
Taxes
|
491
|
534
|
(8)%
|
760
|
(35)%
|
(8,016)
|
Profit After
Taxes
|
1,157
|
1,593
|
(27)%
|
(12,706)
|
|
5,573
|
Profit After Taxes
before Exceptional items
|
1,157
|
1,635
|
(29)%
|
747
|
55%
|
2,915
|
Minority
Interest
|
542
|
750
|
(28)%
|
522
|
4%
|
58%
|
Minority Interest
excl.Exceptional Items %
|
47%
|
46%
|
|
108%
|
|
(10,931)
|
Attributable PAT
after exceptional items
|
615
|
843
|
(27)%
|
(13,228)
|
|
2,329
|
Attributable PAT
before exceptional items
|
615
|
884
|
(30)%
|
(62)
|
|
(36.87)
|
Basic Earnings per
Share (Rs./share)
|
2.07
|
2.84
|
(27)%
|
(44.62)
|
|
7.86
|
Basic EPS before
Exceptional Items
|
2.07
|
2.98
|
(30)%
|
(0.20)
|
|
65.46
|
Exchange rate (Rs./$)
– Average
|
66.93
|
63.50
|
5%
|
67.50
|
(1)%
|
66.33
|
Exchange rate (Rs./$)
– Closing
|
67.62
|
63.75
|
6%
|
66.33
|
2%
|
1. Excludes
custom smelting at Copper India and Zinc India operations
2.
Exceptional Items Gross of Tax
Note: All numbers are as per Ind AS. Previous period figures
have been regrouped / rearranged wherever necessary to conform to
current period presentation.
Revenues
Revenues in Q1 were 9% lower sequentially due to lower volumes
at Zinc India and Copper India, partially offset by higher metal
and oil prices.
On y-o-y basis, revenues in Q1 were 15% lower, on account of the
fall in oil and metal prices, weaker power market and lower zinc
volumes, partially offset by ramp up in volumes at Iron Ore, Power
and Aluminium.
EBITDA and EBITDA Margins
EBITDA at Rs. 3,543 crore was 2%
higher sequentially due to higher metal and oil prices, and higher
volumes at Iron Ore, partially offset by lower Zinc volumes.
However on a y-o-y basis EBITDA was lower by 14% primarily due
to lower commodity prices.
EBITDA margin was strong at 32% in the current quarter. The
higher margin was a result of strong cost saving initiatives and
volume ramp-up at Aluminium and Iron Ore. Cost saving initiatives
include clean-sheet based negotiations, optimizing sourcing mix in
key raw materials, logistics, and consolidation of spend and
contracts.
Depreciation
Depreciation in Q1 was at Rs.1,492 crore,
higher by Rs. 69 crore sequentially
mainly at Cairn India where Q4 FY2016 depreciation was lower due to
actualization of entitlement reserves at year end.
Depreciation was marginally lower y-o-y, mainly on lower volumes
at Cairn India, and closure of the Lisheen zinc mine in Q3 FY2016,
partially offset by capitalization of aluminium & power
capacities over the period.
Finance Cost and Other Income
Post commencement of Aluminium pots ramp-up at Jharsuguda-II,
the Company with effect from March
2016, has revised the accounting methodology with regards to
the finance cost pertaining to the non-capitalized pots at
Jharsuguda-II, wherein the interest cost will be expensed following
actual capitalisation of the pots (the complete interest cost
pertaining to Jharsuguda-II was being expensed earlier). Hence,
finance cost during the quarter at Rs. 1,393
crore was 11% lower sequentially.
Finance costs were marginally higher by Rs.20 crore y-o-y, primarily driven by
capitalisation of power units, increase in temporary borrowing at
Zinc India, and due to change in INR/USD borrowing mix. These were
partially offset by refinancing benefits and the change in
methodology in expensing of interest pertaining to Jharsuguda-II,
as explained above.
Other income at Rs.1,094 crore decreased by Rs.157 crore sequentially due to lower investment
corpus on account of pay out of special dividend at the beginning
of the quarter at Zinc India.
Other income increased by Rs 139
crore y-o-y primarily due to higher mark to market gain on
investments in current quarter partially offset by lower investment
corpus on account of pay out of special dividend at the beginning
of the quarter at Zinc India.
Non-Operational Forex Loss/Gain
During the quarter, rupee depreciation of 2% led to a forex loss
of Rs.67 crore primarily on
restatement of MAT assets at Oil & Gas business.
Taxes
Tax expense was Rs. 491 crore
during the quarter, implying a tax rate of 30% (excluding DDT Rs.
434 crore, 26% tax rate) compared
with tax rate of 10% for FY 2016 (excluding DDT and one-offs).
Higher tax rate during Q1 FY2017 is mainly on expiry of tax
holiday period at Zinc India and Oil & Gas business.
Tax rate for Q4 FY2016 was (14)% (excluding DDT). Q1 FY2017 tax
rate is not comaprabale to Q4 FY2016 due to one-time write backs
during Q4. Tax rate for FY17 (excluding DDT) is likely to be
lower.
Attributable Profit After Tax and Earnings Per Share
(EPS)
Attributable Profit After Tax (PAT) for the quarter is at Rs.
615 crore and Attributable EPS for
the quarter was at Rs. 2.07 per share.
Ind AS implementation
Company has adopted Ind AS for preparation of accounts.
Comparative periods have been restated under Ind AS as per the
guidelines. These are not audited. The opening balance sheet as at
1st April 2015 and the sub
periods would get finalized along with annual financial statements
for year ended 31st March
2017.
Key differences / impact of Ind AS on numbers are:
- 1) Fair Value of investments
- 2) Goodwill amortization
changes
- 3) FX variation in US$ functional
ledger
- 4) Dividend distribution tax
accounting
- 5) Goodwill amortisation
Please refer to financial results and pro-forma in the investor
presentation, available on our website.
The Company is actively managing its balance sheet with a focus
on maximizing free cash flow, refinancing and terming out maturing
debt, and simplifying the group structure. Our financial
position remains robust with cash and liquid investments of Rs.
52,299 crore, which is invested in
debt related mutual funds, bank deposits and high quality bonds,
and undrawn committed facilities of c.Rs. 6,500 crore as on June 30,
2016.
As on 30 June 2016, gross debt
reduced by Rs. 606 crore during the
quarter to Rs. 76,953 crore given
repayment of inter- company loan of Rs 5,736
crore to Vedanta Resources Plc, partially offset by
borrowings at Zinc India and Aluminium businesses. Net debt
increased by Rs. 6,400 crore to 24,654
crore mainly on pay out of special dividend at Zinc India
during the current quarter.
Out of the total debt of Rs. 76,953
crore, the INR/USD split is approximately 63%/ 37%. Further,
the gross debt comprises of long term loans of Rs. 59,263 crore and short term loans of Rs.
17,690 crore.
FY2017 debt maturities are Rs. 12,406
crore, which we intend to meet through a combination of roll
over, refinancing, internal accruals and working capital
initiatives. We continue to evaluate different structures and
options for future maturities with an objective to lower funding
cost and/or extend the maturity profile.
Revise Term for Merger – Vedanta Limited & Cairn
India
The Boards of Vedanta Limited and Cairn India have approved
revised and final terms for the Transaction on 22nd July 2016, taking into account prevailing
market conditions and having regard to underlying commercial
factors.
Pursuant to the revised and final terms, each Cairn India
minority shareholder will receive for each equity share held:
- 1 equity share in Vedanta Limited; and
- 4 Redeemable Preference Shares with a face value
of INR 10 in Vedanta Limited, with a coupon of 7.5% and tenure of
18 months from issuance.
The Jurisdictional High Courts have convened the shareholder
meetings for each of Vedanta Limited and Cairn India on
8 September 2016 and 12 September 2016, respectively. The Notice
convening the shareholder meetings will be sent to shareholders in
due course.
The Transaction is expected to close by Q1 CY2017.
Results Conference Call
Please note that the results presentation is available in the
Investor Relations section of the company website
www.vedantalimited.com
Following the announcement, there will be a conference call at
6:00 PM (IST) on Friday,
29th July 2016, where
senior management will discuss the company's results and
performance. The dial-in numbers for the call are as below:
Event
|
|
Telephone
Number
|
Earnings conference
call on
29 July
2016
|
India – 6:00 PM
(IST)
|
Mumbai main
access
+91 22 3938
1017
Mumbai standby
access
+91 22 6746
8333
|
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 – 8:30 AM
(Eastern Time)
|
Toll free
number
1 866 746
2133
|
For online
registration
|
http://services.choruscall.in/diamondpass/registration?confirmationNumber=5267915
|
Replay of Conference
Call
(29 July 2016
to 4 Aug 2016)
|
|
Mumbai
+91 22 3065
2322
+91 22 6181
3322
Passcode:
63835#
|
For further
information, please contact:
|
|
Communications
|
|
Roma
Balwani
|
Tel: +91 22 6646
1000
|
President – Group
Communications, Sustainability&CSR
|
gc@vedanta.co.in
|
Investor
Relations
|
|
Ashwin
Bajaj
|
Tel: +91 22 6646
1531
|
Director –
Investor Relations
|
vedantaltd.ir@vedanta.co.in
|
Vishesh
Pachnanda
Manager – Investor Relations
Sunila Martis
Manager –
Investor Relations
About Vedanta Limited (Formerly SesaSterlite Ltd.)
Vedanta Limited is a diversified natural resources company,
whose business primarily involves producing oil & gas, zinc -
lead - silver, copper, iron ore, aluminium and commercial power.
The company has a presence across India, South
Africa, Namibia,
Australia, Ireland, Liberia and Sri
Lanka.
Vedanta Limited, formerly SesaSterlite Limited is the Indian
subsidiary of Vedanta Resources Plc, a London-listed company. Governance and
Sustainable Development are at the core of Vedanta's strategy, with
a strong focus on health, safety and environment and on enhancing
the lives of local communities. Vedanta Limited is listed on the
Bombay Stock Exchange and the National Stock Exchange in
India and has ADRs listed on the
New York Stock Exchange.
For more information please log on to www.vedantalimited.com
Vedanta Limited
(Formerly known as SesaSterlite
Limited)
Vedanta, 75, Nehru Road,
Vile Parle (East), Mumbai - 400
099
www.vedantalimited.com
Registered Office:
SesaGhor, 20 EDC Complex,
Patto, Panaji (Goa) - 403 001
CIN: L13209GA1965PLC000044
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.
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