Vedanta Limited · NSE:VEDL
Vedanta — Q2 FY2024 Earnings Presentation
44 slides from Vedanta's earnings presentation, Nov 4, 2023
Slide 1: Earnings Presentation 2QFY24 Vedanta Limited
EARNINGS PRESENTATION 2QFY24 VEDANTA LIMITED TRANSFORMING TOGETHER Inclusive. Responsible. Value-accretive delivery Sensitivity: Internal (C3)
Slide 2: Cautionary statement and disclaimer
Cautionary statement and disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forwa
Slide 3: Business Performance
VEDANTA LIMITED EARNINGS PRESENTATION 2QFY24 Business Performance Arun Misra Executive Director Vedanta Limited Sensitivity: Internal (C3)
Slide 4: Our commitment to excellence – our path to leadership
ESG Our commitment to excellence – our path to leadership ESG Pillars Transforming Communities Transforming Planet Transforming Workplace Aim 1 Keeping community welfare at the core of Aim 4 Net-carbon neutrality by 2050 or sooner Aim 7 Prioritizing safety and health of all business decisions employ
Slide 5: Empowering communities with focused actions
Empowering communities with focused actions Highlights 16.1 million ₹ 226 crore 5700+ Total Beneficiaries CSR Spend in 1HFY24 Operational Nandghar Healthcare Drinking water > 1700 crore spent on CSR > 30 Initiatives and sanitation activities since 2020 > 15 Initiatives ₹ crore Community 454 Children
Slide 6: Vedanta Limited announced demerger into 6 different entities
Strategic Update Vedanta limited announced demerger into 6 different entities Vedanta Limited ▪ Display 1 ▪ Hindustan Zinc Limited ▪ Vedanta Stainless ▪ Semiconductors (FACOR & Nicomet) ✓ Direct investment opportunity in India focused, pure play commodities businesses Vedanta Aluminium 2 ▪ Including
Slide 7: 2QFY24 Operational Highlights
2QFY24 Operational Highlights Resilient operational performance backed by aggressive cost reduction Aluminium Zinc Iron and Steel Other Highlights Cast house, Jharsuguda Dariba Smelting Complex, HZL Coke oven plant, ESL Steel Fumer Plant, Chanderiya RD Mill Aluminium 10% lowerProduction y-o-y, Zinc
Slide 8: Significant cost reduction across key businesses
Significant cost reduction across key businesses Aluminum CoP ($/t) Zinc India CoP ($/t) ZI - Gamsberg CoP ($/t) - 615 $/t y-o-y - 122 $/t y-o-y - 16 $/t y-o-y Oil and Gas – Opex ($/boepd) ▪ Strong cost improvement measures ▪ 150+ $/t cost improvement over last 3 quarters ▪ 25% reduction in Aluminum
Slide 9: Aluminium Business: Focused on growth and business integration
Aluminium Business Focused on growth and business integration Aluminium Production (kt) Key Highlights: ▪ Highest ever Aluminium production up 2% y-o-y, 3% q-o-q 1,149 1,173 +2% y-o-y ▪ Highest ever production run rate ▪ Increasing trend for 3rd consecutive quarter ▪ Aluminium CoP lower by 25% y-o-y
Slide 10: Aluminium Business: Vision to be 3 MTPA Aluminium producer
Aluminium Business: Vision to be 3 MTPA Aluminium producer Aluminium Value Chain – Existing Post Expansion (< 2 years) Target Outcome Bauxite Alumina Smelting Bauxite Alumina Smelting ~6 MTPA Aluminium Aluminium (50% – domestic 2 MTPA 9 MTPA 51 MTPA procurement) (45% Captive) 2.3 MTPA (Captive Bauxi
Slide 11: Lanjigarh refinery expansion project gearing up for commissioning
Lanjigarh refinery expansion project gearing up for commissioning 2→ 5 MTPA 6000+ workmen Train 1 of 1.5 MTPA Highlights actively working on site Expansion Expected commissioning in 4QFY24 Settler Washer Unit completed Completion of LFR unit Boiler Oil Firing test completed Ball Mill 6 & 7 trial in
Slide 12: Zinc India: A step closer to 1.25 MTPA capacity
Zinc India A step closer to 1.25 MTPA capacity with commissioning of growth projects ▪ Highest ever first half mined metal production at 509 kt HZL commissioned three growth projects: ▪ Quarterly CoP decreased 10% y-o-y and 5% q-o-q due to better ✓ Fumer : Full ramp up on track to complete by early
Slide 13: Zinc International
Zinc International Strong focus on production enhancement and cost reduction Total MIC Production Key highlights: Gamsberg (kt) BMM (kt) ▪ Quarterly total production at 66 kt, lower 3% q-o-q 33 -3% q-o-q 37 108 ▪ Half yearly production at BMM increased 11% y-o-y 80 97 19 60 19 18 ▪ 1HFY24 Gamsberg C
Slide 14: Oil & Gas: Stable operations with sustained commitment to growth projects
Oil & Gas Stable operations with sustained commitment to growth projects Gross Production (kboepd) Key highlights: Flat q-o-q ▪ Stable 2QFY24 production at 134 kboepd supported by production from infill wells in Mangala, Bhagyam, Aishwarya 140 135 134 144 134 and RDG fields ▪ 2QFY24 opex lower by 6%
Slide 15: Iron and Steel: Crossed milestone of 1mnt total steel production
Iron and Steel Crossed milestone of 1mnt total steel production1 in 1HFY24 Karnataka Iron Ore VAB ESL Sales (mnt) Production (kt) Saleable production (kt) 702 2.5 +17% y-o-y +14% y-o-y +80% y-o-y 430 2.2 593 309 1.5 378 1.3 324 324 213 218 1.0 121 2Q 1Q 2Q 1H 1H 2Q 1Q 2Q 1H 1H 2Q 1Q 2Q 1H 1H FY23 FY
Slide 16: FACOR: Aim to become the largest ferrochrome producer in India
FACOR Aim to become the largest ferrochrome producer in India FACOR – Quarterly Highlights FACOR – Growth Project Phase 1 Key Highlights Objective: ▪ Ferrochrome production at 22 kt, up 97% YoY ▪ Ferrochrome capacity expansion by 300 KTPA ▪ 2QFY24 margin improved to 195$/t driven by higher Approved
Slide 17: Finance Update
VEDANTA LIMITED EARNINGS PRESENTATION 2QFY24 Finance Update Ajay Goel Chief Financial Officer Sensitivity: Internal (C3)
Slide 18: 2QFY24 financial snapshot
2QFY24 financial snapshot PAT before REVENUE EBITDA EBITDA Margin1 exceptional ₹ 38,546 crore ₹ 11,834 crore 35% ₹ 4,403 ₹ 3,132 crorecrore 16% q-o-q 70% q-o-q Robust EBITDA margin ~3x q-o-q (+ 1% vs 3QFY23) Cash & Cash ROCE2 FCF (Pre-capex) Net Debt/EBITDA Equivalent 21% ₹ 5,694 crore 1.64x ₹
Slide 19: EBITDA Bridge (2QFY24 vs. 1QFY24)
EBITDA BRIDGE (2QFY24 vs. 1QFY24) (In ₹ crore) +70% vs 1QFY24 EBITDA Alum (488) Zinc (122) ESL (81) Oil & Gas 32 Market & Regulatory ₹150 crore 19 Ex rate: 2QFY24 82.68 vs 1QFY24 82.16 Vedanta Limited Note: others include impact of favorable arbitration award in Oil and Gas Business 2QFY24 Investor
Slide 20: EBITDA Bridge (2QFY24 vs. 2QFY23)
EBITDA BRIDGE (2QFY24 vs. 2QFY23) (In ₹ crore) +47% vs 2QFY23 EBITDA Alum (904) Zinc (996) Oil & Gas (457) Steel (139) Market & Regulatory ₹457 crore 20 Ex rate: 2QFY24 82.68 vs 2QFY23 79.69 Vedanta Limited Note: others include impact of favorable arbitration award in Oil and Gas Business, offset by
Slide 21: Net Debt Walk 2QFY24
Net Debt Walk 2QFY24 (In ₹ crore) FCF post Capex ₹2,949 crore 21 Vedanta Limited 2QFY24 Investor Presentation Sensitivity: Internal (C3)
Slide 22: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA Debt breakdown 1.88 Gross Debt In $bn In ₹ 000’ crores 1.64 1.28 Term debt 8.05 67.00 1.01 0.89 Working capital 0.19 1.60 0.46 Short term borrowing 0.71 5.87 Total consolidated debt 8.95 74.47 FY20 FY21 FY22 FY23 1QFY24 2QFY24 Cash and Cash Equivale
Slide 23: FY24 key priorities
FY24 key priorities Deliver on target volume growth across businesses Strive for timely completion of capex projects Focus on integrated Aluminum operations to reduce impact on market volatility Continued focus on sustainable shareholder Reduce costs to sustain and improve margins value creation Imp
Slide 24: Continued disciplined investment in value adding growth
Continued disciplined investment in value adding growth ($ Bn) FY growth capex guidance 1.2 0.7 1.1 2.0 1.7 Growth Capex profile Oil & Gas Zinc 1.7 Al & Power 0.3 Other 1.2 0.2 0.6 0.8 0.7 0.5 0.7 0.1 0.1 0.2 0.2 0.4 0.1 0.3 0.3 0.3 0.5 0.0 0.0 0.4 0.1 0.1 0.4 0.2 0.2 0.2 FY2020 FY2021 FY2022 FY2023
Slide 25: Appendix
VEDANTA LIMITED EARNINGS PRESENTATION 2QFY24 Appendix Sensitivity: Internal (C3)
Slide 26: FY24 Production and Cost Guidance
FY24 Production and Cost Guidance Zinc India Aluminium ▪ Mined Metal : 1,075 - 1,100 kt ▪ Alumina: 1.9 - 2.1 Mnt ▪ Finished Metal: 1,050 – 1075 kt ▪ Aluminium: 2.2 - 2.3 Mnt ▪ Silver: 725 - 750 tonnes ▪ COP1: $1,800/t - $1,900/t ▪ COP: $1,125/t - $1,175/t excluding royalty Zinc International Oil & G
Slide 27: Income statement
Income statement ▪ Depreciation & Amortization: Increased by 4% q-o-q 2Q 1Q 2Q In ₹ Crore largely due to higher depletion charge at Oil & Gas FY24 FY24 FY23 Business. Revenue from operations 38,546 33,342 36,237 Other operating income 399 391 417 EBITDA 11,834 6,975 8,038 ▪ Finance Cost: Increased b
Slide 28: Project capex
Project capex Approved Spent up to Spent in Unspent4 as on Capex in Progress (In $ mn) Status Capex2 FY233 1HFY24 30th Sep 2023 Cairn India1 – Mangala, Bhagyam & Aishwariya infill, 853 337 140 376 OALP, ABH infill, RDG infill, Offshore infill etc Aluminium Sector Jharsuguda VAP capacity expansion an
Slide 29: Entity-wise Cash and Debt
Entity-wise Cash and Debt Sep 30, 2023 June 30, 2023 Sep 30, 2022 Company Cash & Cash & Cash & Debt Net Debt Debt Net Debt Debt Net Debt Cash Eq Cash Eq Cash Eq Vedanta Limited Standalone 42,494 1,959 40,535 44,274 1,396 42,878 45,296 3,953 41,343 Cairn India Holdings Limited1 2,628 1,820 808 2,590
Slide 30: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $8.1 Bn Long Term Debt Maturities : ₹ 67K crore ($8.1 bn) (as of Sep 30, 2023) (as on Sep 30, 2023) Standalone Subsidiaries 0.1% In ₹ 000’ crore 21% 16% 34.0 Bonds INR Term Loan INR Term Loan Fx 15.8 Bonds Fx
Slide 31: Segment Summary – Aluminium
Segment Summary – Aluminium Particulars (in’000 tonnes, or as Quarter Half Year stated) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Alumina – Lanjigarh 464 454 2% 395 859 939 (8%) Total Aluminum Production 594 584 2% 579 1,173 1,149 2% Jharsuguda 447 443 1% 433 880 866 2% Balco 147 141 5% 146 293
Slide 32: Aluminium profitability
Aluminium profitability $/t Hot metal cost 1QFY24 2,258 8 180 2,446 (773) (642) (517) (123) 391 1,932 2QFY24 1,814 201 5 2,154 2,360 697 1,663 625 493 142 403 LME Strategic Premium Realisation Alumina Power Other hot Conversion & EBITDA Hedging metal other 32 Vedanta Limited 2QFY24 Investor Presenta
Slide 33: Segment Summary – Zinc India
Segment Summary – Zinc India Quarter Half Year Production (in ’000 tonnes, or as stated) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Mined metal content 252 255 (1%) 257 509 507 0% Integrated metal 241 246 (2%) 260 501 506 (1%) Refined Zinc – Integrated 185 189 (2%) 209 394 395 (0%) Refined Lead
Slide 34: Segment summary – Zinc International
Segment summary – Zinc International Quarter Half Year Production (in’000 tonnes, or as stated) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Mined metal content- BMM 18 19 (3%) 19 37 33 11% Mined metal content- Gamsberg 48 55 (13%) 49 97 108 (10%) Total 66 74 (10%) 68 134 141 (5%) Financials (In ₹
Slide 35: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Quarter Half Year Oil and Gas (boepd) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Average Daily Gross Operated Production 134,092 140,471 (5%) 134,867 134,477 144,267 (7%) (boepd) Rajasthan 112,215 120,805 (7%) 111,916 112,066 124,291 (10%) Ravva 10,860 9,952 9% 11,663
Slide 36: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Quarter Half Year Oil and Gas (boepd) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Average Daily Production Gross operated 134,092 140,471 (5%) 134,867 134,477 144,267 (7%) Oil 109,117 118,279 (8%) 110,959 110,033 122,264 (10%) Gas (Mmscfd) 150 133 13% 143 147 132 11% N
Slide 37: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore and Steel Iron Ore Particulars (in million dry metric tonnes, or Quarter Half Year as stated) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Production of Saleable Ore 1.2 1.1 14% 1.2 2.4 2.3 4% Goa - - - - - Karnataka 1.2 1.1 14% 1.2 2.4 2.3 4% Production (’000 tonnes) Pi
Slide 38: Segment Summary – FACOR and Copper
Segment Summary – FACOR and Copper Copper Quarter Half Year Production (in ’000 tonnes, or as stated) 2QFY24 2QFY23 % YoY 1QFY24 1HFY24 1HFY23 % YoY Copper - Cathodes 35 41 (14%) 31 66 79 (16%) Financials (In ₹ crore, except as stated) Revenue 4,606 4,011 15% 4,733 9,339 8,266 13% EBITDA (62) 15 - (
Slide 39: Sales Summary – Zinc and Aluminium
Sales Summary – Zinc and Aluminium Quarter Half Year Sales volume 2QFY24 2QFY23 1QFY24 1HFY24 1HFY23 Zinc-India Sales Refined Zinc (kt) 185 189 208 393 395 Refined Lead (kt) 57 57 50 107 110 Total Zinc-Lead (kt) 242 246 259 501 505 Silver (tonnes) 181 194 179 360 371 Zinc-International Sales Zinc Co
Slide 40: Sales summary – Iron & Steel, FACOR and Power
Sales summary – Iron & Steel, FACOR and Power Quarter Half Year Sales volume Quarter Half Year Sales volume 2QFY24 2QFY23 1QFY24 1HFY24 Power Sales (mu) 2QFY24 2QFY23 1QFY24 FY24 Iron ore sales Jharsuguda 506 634 618 1124 Goa (mn dmt) 0.0 0.0 0.1 0.1 TSPL 2795 2,843 2,830 5625 Karnataka (mn dmt) 1.5
Slide 41: Group structure
Group structure As of 30-Sep-23 Listed entities Vedanta Resources Ltd Unlisted entities Divisions of Vedanta Limited 63.71% ⚫ Sesa Iron Ore ⚫ Sterlite Copper ⚫ Power (600 MW Jharsuguda) Vedanta Ltd ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 5
Slide 42: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ ₹ 800 crore / year Commodity prices – Impact of a 10% increase in Commodity Prices H1FY24 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 83 33 Zinc ($/t) 2,
Slide 43: Awards and Accolades
Awards and Accolades Recognitions towards our commitment to excellence 50+ Gold & Rank - 1 at Confederation Society of Silver awards Most Active Fire and Security of Indian Industry Energy Engineers under 22nd Chapter Industry in Association (CII) National & Managers Convention on Certificates Marke
Slide 44: Earnings conference call dial in details
Earnings conference call dial in details Event Telephone Number Earnings conference call on 4th +91 22 6280 1114 November 2023, from 5:00 - Universal Dial-In +91 22 7115 8015 6:00 PM (IST) India National Toll 1 800 120 1221 Free Canada 01180014243444 Hong Kong 800964448 Japan 00531161110 Internation