Vedanta Resources — H1 FY2021 Earnings Presentation
32 slides from Vedanta Resources's earnings presentation, December 2020
Slide 1: Investor Presentation H1 FY2021
OUR EARTH OUR GROWTH THE SUSTAINABLE WAY VEDANTA RESOURCES LTD. INVESTOR PRESENTATION H1 FY2021 EE pe December 2020 =. vedanta Desh Ki Zarooraton Ke Liye Resources That Grow Nations
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page H1 FY21 Review & Business Update Sunil Duggal, CEO 4 Financial Update Arun Kumar, CFO 12 Appendix 19 VEDANTA RESOURCES LIMITED – H1 FY2021 INVESTOR PRESENTATION 3 Sensitivity: Internal (C3)
Slide 4: H1 FY2021 Review & Business Update
H1 FY2021 H1 FY2021 Review Sunil Duggal | Chief Executive Officer & Business Update
Slide 5: Key Highlights: H1 FY2021
Key Highlights: H1 FY2021 ▪ Zinc India ever highest ore production of 7.03 Mnt since underground transition Silver production 320 tonnes, up 9% lowest ever half-yearly cost of $965/t since underground operations ▪ Zinc International Gamsberg highest ever production of 60kt in H1 FY 21 ▪ O&G gross pr
Slide 6: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Program Update Environment Update ▪ Increased focus on explosives safety, Water ▪ ~7.5 million m3 of water fatality prevention program conservation savings over three years 3 fatalities in Q2 ▪ Development of HSES video training module G
Slide 7: Zinc India: Strong Foundation Driving Growth
Zinc India: Strong Foundation Driving Growth Performance Update Metal in Concentrate Production Quarter Performance: 432 440 ▪ MIC Production 238kt, up 18% q-o-q 219 238 ▪ Metal Production 237kt, up 18% q-o-q 202 ▪ Highest ever Silver Production 203 tonnes, up 73% q-o-q Q2 FY20 Q1 FY21 Q2 FY21 H1 FY
Slide 8: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Performance Update Gamsberg Quarter Performance: ▪ Production at 35kt, up 38% q-o-q. Best ever production (14kt) achieved in Sep ▪ Overall production at 51kt, up 33% q-o-q ▪ COP at $1,246, down 6% q-o-q due to better ▪ COP of $1,3
Slide 9: Oil & Gas: Focus on Delivery of Growth Projects
Oil & Gas: Focus on Delivery of Growth Projects Growth Projects OALP ▪ Key projects on track to complete by Q3 FY21: ▪ FTG: Completed in 3 Cambay blocks (~15,000 LKM); • Gas introduced in the new terminal, sales to Work in progress in 7 Rajasthan blocks (~10,000 LKM) commence in Q3 FY21 (incremental
Slide 10: Aluminium: Record Cost Performance
Aluminium: Record Cost Performance Structural Reduction in Cost Performance Update 1,852 1,810 Quarter Performance: ▪ Aluminium COP at $ 1,288/t, marginally up 2% q-o-q 1,268 1,288 1,278 ▪ Both of our smelters at Jharsuguda and Balco operate in 1st quartile* of the cost curve for the year 2020 ▪ Lan
Slide 11: Other Assets: Iron ore and ESL Steel
Other Assets: Iron ore and ESL Steel Iron Ore ESL Steel Performance Update Performance Update Quarter Performance: Quarter Performance: ▪ Karnataka sales 1.3 Mnt, significantly up q-o-q ▪ Production 260kt, down 3% q-o-q ▪ Pig Iron production 186kt, up 71% q-o-q ▪ Sales 271kt, down 11% q-o-q ▪ Margin
Slide 12: Finance Update
H1 FY2021 Finance Update Arun Kumar | Chief Financial Officer
Slide 13: Financial snapshot
Financial snapshot EBITDA ROCE EBTIDA Margin* Cash & Cash Equivalent $ 1.44 bn 12% 34% $ 6.9 bn Up 3% y-o-y Continued double digit Robust Margin Strong liquidity * Excludes custom smelting at Copper India, Copper Zambia and Zinc-India operations EBITDA Bridge (In $ mn) Aluminium (182) Zinc, Lead & S
Slide 14: Net Debt for H1 FY 2021
Net Debt for H1 FY 2021 (In $ mn) Inventory , Debtors & Others 65 Creditors/Customers Advance (630) 433 30 75 10,650 10,005 387 845 565 FCF $ (107) mn CF from WC Movements Capex Dividend Paid FACOR Translation 1st Apr’20 30th Sep’20 Operations (Incl Buyer’s Acquisition & others credit) VEDANTA RESOU
Slide 15: Balance Sheet
Balance Sheet Term Debt Maturities# - $16.3 bn (as of Sep 30, 2020) ▪ Liquidity 4.5 3.6 3.5 – Cash & LI# @ $ 6.9 billion 3.1 2.6 1.1 ▪ Net Interest $ bn 1.9 1.3 ▪ Interest Income – Returns ~5.9%. 1.6 0.4 2.5 ▪ Interest Expense – Maintained ~7.2% 1.8 1.9 1.6 1.2 FY21* FY22 FY23 FY24* FY25 & Later Sta
Slide 16: Capex and Returns Profile
Capex and Returns Profile Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.2 1.1 0.1 0.8 0.8 0.7 0.1 0.5 0.1 0.7 0.6 0.1 0.1 0.2 0.2 0.3 0.1 0.5 0.1 0.2 0.2 0.3 0.03 0.05 0.2 0.1 0.1 0.5 0.5 0.15 0.4 FY2016 FY2017 FY2018 FY2019 F
Slide 17: To Summarize: A Sustainable Business Model
To Summarize: A Sustainable Business Model Vedanta; A 20 Year Track Record Of Delivering Growth, Meeting All Obligations To Debt Holders On Schedule, Primary Focus Is On Stable Production With Healthy Cash Flow In Volatile Times Diversified Business Model Pro-active Balance Sheet Leveraging Strength
Slide 18: Key Investment Highlights
Key Investment Highlights 1 Large Low Cost, Long Life and Diversified Asset Base with an Attractive Commodity Mix 2 Ideally Positioned to Capitalise on Favourable Geographic Presence 3 Well-Invested Assets Driving Cash Flow Growth 4 Operational Excellence and Technology Driving Efficiency and Sustai
Slide 19: Appendix
VEDANTA RESOURCES LTD. INVESTOR: PRESENTATION H1 FY2021
Slide 20: FY 2021 Guidance
FY 2021 Guidance Segment FY21 Production and COP Mined Metal and Finished Metal: 925 – 950 kt Zinc India Silver: c. 650 tonnes COP: < $1,000/t excluding royalty BMM: ~65kt Gamsberg: 150-160kt Zinc International ZI COP (excl Gamsberg) : $1,300/t Gamsberg: c $1,200/t Gross Volume: 170-180 kboepd; Exit
Slide 21: Income Statement
Income Statement Depreciation & Amortization H1 H1 In $ mn FY’21 FY’20 ▪ Lower majorly on account of Oil & Gas assets Revenue from operations 4,875 6,132 impairment in Q4 FY 20. EBITDA 1,440 1,395 Depreciation & amortization (529) (711) EBIT 911 684 Finance Cost Finance Cost (576) (615) ▪ Lower prim
Slide 22: Project Capex
Project Capex Approved Spent up to Capex3 Spent in H1 Unspent as at Capex in Progress Status ($mn) 31 Mar’204 FY20214 30 Sep 20205 Cairn India1 – Mangala Infill, Liquid handling, 2,522 1,144 86 1,292 Bhagyam & Aishwariya EOR, Tight Oil & Gas etc Aluminium Sector Line 3: Fully capitalised Line 4: Ful
Slide 23: Entity Wise Cash and Debt
Entity Wise Cash and Debt 30 Sep 2020 ($ mn) 31 Mar 2020 ($ mn) Company Debt5 Cash & LI5 Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 4,365 267 4,098 5,053 672 4,380 Cairn India Holdings Limited1 491 625 (133) 494 1,027 (533) Zinc India 1,331 3,756 (2,425) 82 2,974 (2,892) Zinc Intern
Slide 24: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $16.3bn Debt Breakdown (as of 30th Sep 2020) (as of 30 Sep 2020) Debt breakdown as of (in $bn) 30 September 2020 Term debt# 16.3 Term Loans-INR Working capital 0.5 25% Bonds-INR Short term borrowing 0.8 34% Term Loans-USD/
Slide 25: Segment-wise Summary
Segment-wise Summary Oil & Gas H1 FY21 H1 FY20 Zinc-India H1 FY21 H1 FY20 Average Daily Gross Operated Mined Metal Content (kt) 440 432 Production (boepd) 161,929 179,398 Refined Zinc – Integrated (kt) 338 338 Rajasthan 130,128 149,790 Refined Lead – Integrated (kt)1 101 91 Ravva 21,822 13,015 Salea
Slide 26: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Aluminium H1 FY21 H1 FY20 Copper H1 FY21 H1 FY20 Aluminium Production (kt) Copper Cathodes– India (kt) 41 31 941 947 Jharsuguda I - 500kt Average Copper LME ($/t) 5,956 5,952 263 271 EBITDA ($mn) (6) (23) Jharsuguda II - 1,250kt1 399 401 Korba-I 245kt 131 126 Korba-II 3
Slide 27: Aluminium profitability
Aluminium profitability $/t Q1 ‘FY21 1,497 64 40 1,601 (517) (469) (281) 26 # 360 (134) (295) (69) 1,268 Q2 ‘FY21 1,288 47 66 1,817 1,704 534 479 275 51 477 139 333 5 Ingot Value Realisation Alumina Power Other Conversion EBITDA Dep Int PBT LME Premium addition Hot & Others 245 Metal # Conversion &
Slide 28: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Power H1 FY21 H1 FY20 Iron Ore H1 FY21 H1 FY20 Power Sales (million units) 5,843 6,773 Sales (dmt) 2.5 2.6 Jharsuguda 600MW 1,493 287 Goa 0.7 - BALCO 821 878 Karnataka 1.8 2.6 Talwandi Sabo 1980MW 3,310 5,309 Production (mt) 2.4 2.4 HZL Wind Power 219 298 Goa - - Power
Slide 29: Sales Summary
Sales Summary Sales volume H1 FY21 H1 FY20 Sales volume H1 FY21 H1 FY20 Sales volume H1 FY21 H1 FY20 Power Sales (mu) Zinc-India Sales Iron-Ore Sales Jharsuguda 600 MW 1,493 287 Refined Zinc (kt) 344 335 Goa (mn DMT) 0.7 - TSPL 3,310 5,309 Refined Lead (kt) 102 91 Karnataka (mn DMT) 1.8 2.6 Total Zi
Slide 30: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of 1 ₹ depreciation in FX Rate Currency Increase in EBITDA INR/USD ~US $ 30 – 35 million / year Commodity prices – Impact of a 10% increase in Commodity Prices H1 FY‘21 Commodity Average price EBITDA ($mn) Oil ($/bbl) 36.1 27 Zinc ($/t)
Slide 31: Group – Present Debt Structure
Group – Present Debt Structure ($ bn) Vedanta Resources (Consolidated) Volcan H1 FY21 H1 FY21 EBITDA 1.44 EBITDA - Net Debt 10.7 Net Debt 0.2 Vedanta Resources (Standalone) H1 FY21 % EBITDA 0.02 1% Divisions of Vedanta Limited Net Debt 7.0 66% 50.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Vedanta Ltd (Con
Slide 32: Results Call
Results Call ▪ The results will be available in the Investor Relations section of our website www.vedantaresources.com ▪ The performance and operations have been comprehensively disclosed and presented in the recent bond roadshows at large to the investor community. Hence there will be no further ea