Vedanta Limited · NSE:VEDL
Vedanta — Q3 FY2019 Earnings Presentation
39 slides from Vedanta's earnings presentation, January 2019
Slide 1: Channelling growth opportunities
Channelling growth Vedanta Limited opportunities OIL&GAS|ZINC&SILVER|ALUMINIUM|POWER|IRONORE|STEEL|COPPER I N V E S T O R P R E S E N T A T IO N - Q 3 F Y 2 0 1 9 January 2019
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 Q3 FY2019 Review Venkat, CEO 4 Financial Update Arun Kumar, CFO 14 Appendix 18 VEDANTA LIMITED – Q3 FY2019 INVESTOR PRESENTATION 3
Slide 4: Q3 FY2019 Review
Q3 FY2019 Review Venkat Chief Executive Officer VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| P O W E R | I R O N O R E | STEEL | C O P P E R
Slide 5: Health, Safety, Environment and Sustainability
Health, Safety, Environment and Sustainability Safety ▪ 2 incidents resulting in 3 fatalities in Q3 FY2019 – Engaged globally renowned consultant DuPont for safe on-site behavior through safety competencies & trainings – Review of Implementation of improved process for ground control: effectiveness
Slide 6: Key Highlights Q3 FY2019
Key Highlights Q3 FY2019 Operations: EBITDA mix (Q3 FY19) • Zinc India: UG production up 38% y-o-y, record silver & 6% Zinc lead production 6% 4% Oil & Gas • Zinc International: First shipment made from Gamsberg in Dec 2018 Aluminium • Aluminium: Strong alumina production, bauxite deliveries 51% Pow
Slide 7: Zinc India: On-track for ramp-up to 1.2mt MIC Capacity
Zinc India: On-track for ramp-up to 1.2mt MIC Capacity Strong Underground Mine Performance in FY19 Q3 FY2019 ▪ Record MIC production from underground Underground OC mines (247kt) 223 ▪ Record Silver Production (178t) ▪ Record refined lead production (54kt) 724 ▪ SK new mill 1.5 Mtpa commissioned and
Slide 8: Zinc International: First shipment from Gamsberg in Dec 2018
Zinc International: First shipment from Gamsberg in Dec 2018 Q3 FY2019 Gamsberg project ▪ Total Production at 38kt higher 34% q-o-q ▪ First parcel of MIC from Gamsberg shipped in Dec18 ▪ Skorpion: 20kt higher 36% q-o-q on account of higher ▪ Successful Ore blending started to deliver quality product
Slide 9: Oil & Gas Business: Execution being ramped up to add volumes
Oil & Gas Business: Execution being ramped up to add volumes • Gross Capex investment of $ 3.2bn (net $ 2.3 bn) being driven through Exploration integrated partnership model with global oil field service companies 41 OALP Blocks Rajasthan KG Offshore Ravva • Gas production to increase by ~ 90 mmscfd
Slide 10: Growth Projects: Wells hook up to add volumes
Growth Projects: Wells hook up to add volumes Gross Capex EUR Q2 plan for Status as on Dec 2018 Project Partner Wells Rigs ($ Million) (mmboe) Dec 2018 Dec 18 Q4 FY2019 Mangala Infill Halliburton 100 45 18 1 22 11 18 8 33 21 Bhagyam & Aishwariya Halliburton 140 42 40 2 33 13 32 10 42 20 Polymer BH-G
Slide 11: Aluminium: Significant progress on Strategic levers
Aluminium: Significant progress on Strategic levers Coal Linkage Dec 2018 COP at $ 1,909/t ▪ 3.2mt linkage Tranche IV taking coal security to 72%, 2,125 Offtake to start from Q4 FY19 ▪ 215kt of coal mined in Q3 from Chotia 1,909 Captive Alumina 1,500 Coal Alumina ▪ Record Alumina production in Q3 at
Slide 12: Other Assets – ESL, Iron Ore and Copper - India
Other Assets – ESL, Iron Ore and Copper - India ESL Iron Ore Copper India Production: ▪ Karnataka sales at 0.6mt; muted ▪ Favorable order from NGT ▪ Q3 exit monthly run rate of e-auction sales - “Closure of plant against c.1.5mtpa ▪ Goa continues to be impacted by principles of natural ▪ Production
Slide 13: Staging for a strong future: Q4 and FY20
Staging for a strong future: Q4 and FY20 Volume ramp-up achieved, expansion on Favourable cost trend to continue based on drawing board improving production and Coal security Zinc India: Steel Aluminium Copper Favorable SC order, poised for a record MIC & silver production in working with Q4. On tra
Slide 14: Financial Update
Financial Update Arun Kumar Chief Financial Officer VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| P O W E R | I R O N O R E | STEEL | C O P P E R
Slide 15: Q3 Financial snapshot
Q3 Financial snapshot Revenue EBITDA Attributable PAT# Rs. 23,669 cr Rs. 5,953 cr 1,574cr Up 4% q-o-q Up 13% q-o-q Up 39% q-o-q EBITDA Margin* ND / EBITDA~ ROCE^ 29% 1.5x 14% Robust margin Remains strong Industry leading Return * Excludes custom smelting at Copper India and Zinc-India operations # B
Slide 16: EBITDA Bridge (Q2 FY2019 vs. Q3 FY2019)
EBITDA Bridge (Q2 FY2019 vs. Q3 FY2019) (In Rs. crore) HZL 330 Aluminum (332) ESL 81 Brent (104) Others 13 Others 8 5,953 410 5,281 428 74 424 335 39 5,045 104 Market & Regulatory Operational Rs. (236) crore Rs. 498 crore 1 Q2 FY19 LME/ Brent Input Currency Regulatory Adjusted Volume Cost & Mktg Oth
Slide 17: Balance Sheet
Balance Sheet *Term Debt Maturities - Rs. 43,543 Crore ($6.2 bn) (as of 31 Dec 2018) ▪ Liquidity Subsidiaries 10.2 12.5 11.2 Standalone 4.5 – Cash and investments @ Rs. 30,530 cr 6.2 4.0 Rs. ‘000 Crore 5.9 rated Tier I by CRISIL; 2.0 8.0 2.8 6.2 – Undrawn lines @ Rs. ~6,700 cr 5.3 4.2 1.6 0.6 0.2 1.
Slide 18: Appendix
Appendix VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| P O W E R | I R O N O R E | STEEL | C O P P E R
Slide 19: FY 2019 Guidance Revised
FY 2019 Guidance Revised Segment FY19 Production and CoP Zinc-Lead Integrated slightly short of FY18 production Zinc India Silver: 650 - 700 tonnes H2 COP: $950-975/t excluding royalty Skorpion and BMM: 150kt Zinc International Gamsberg: c. 20kt COP: ZI (excl Gamsberg) : $1,850 – 1,950, Gamsberg: $8
Slide 20: Income Statement
Income Statement In Rs. crore Q3 FY’19 Q3 FY’18 Q2 FY’19 Depreciation & Amortization Higher q-o-q majorly on account of higher charge due to Revenue 23,669 24,361 22,705 higher ore production at Zinc India and Zinc International EBITDA 5,953 6,677 5,281 and due to capitalization of projects at Oil &
Slide 21: Entity Wise Cash and Debt
Entity Wise Cash and Debt 31 Dec 2018 (Rs Cr) 30 Sept 2018 (Rs Cr) 30 Jun 2018 (Rs Cr) Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 42,708 4,784 37,924 44,754 8,050 36,704 43,263 5,888 37,375 Cairn India Holdings Limited1 3,330 7,195 (3,8
Slide 22: Net Debt for Q3 FY2019
Net Debt for Q3 FY2019 (In Rs. crore) FCF Post Capex Rs. (2,043) crore 136 39,531 10,995 2,885 26,357 4,401 3,753 194 Net Debt Oct 1st CF from Opex WC Movts Buyers Credit Capex Minority Divident Translation & Net Debt Dec 31st Repayments Payout Others VEDANTA LIMITED – Q3 FY2019 INVESTOR PRESENTATIO
Slide 23: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $6.2bn Debt Breakdown (as of 31 December 2018) (as of 31 December 2018) Debt breakdown (in $bn) (Rs. in 000’ Cr) 11% Term debt 6.2 43.6 Term Loans-INR Working capital 0.7 5.0 Bonds-INR Short term borrowing 3.1 21.5 32% 57%
Slide 24: EBITDA Bridge (Q3 FY2018 vs. Q3 FY2019)
EBITDA Bridge (Q3 FY2018 vs. Q3 FY2019) (In Rs. crore) Brent 306 Aluminium (474) Zinc & Lead (974) Others 16 6,677 1,126 6,108 127 158 337 55 5,953 1,122 723 Market & Regulatory Operational Rs. (569) crore Rs. (210) crore Q3 FY18 LME/ Brent / Input Currency Regulatory & Adjusted Volume Cost & Mktg O
Slide 25: Segment Summary – Zinc India
Segment Summary – Zinc India Q3 Q2 9M Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Mined metal content 247 240 3% 232 691 Refined Zinc – Integrated 188 200 (6%) 162 522 Refined Lead – Integrated1 54 46 18% 49 145 Refined Saleable Silver - Integrated (in tonne
Slide 26: Segment Summary – Zinc International
Segment Summary – Zinc International Q3 Q2 9M Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Refined Zinc – Skorpion 20 26 (23%) 15 45 Mined metal content- BMM 18 21 (15%) 13 46 Total 38 47 (20%) 28 91 Financials (In Rs. crore, except as stated) Revenue 622 970
Slide 27: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 Average Daily Gross Operated Production (boepd) 187,191 184,133 2% 185,926 189,347 Rajasthan 151,574 157,096 (4%) 155,194 156,910 Ravva 16,775 16,876 (1%) 13,496 14,832 Cambay 18,842 10,161 85% 17,2
Slide 28: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Average Daily Production Gross operated 187,191 184,133 2% 185,926 189,347 Oil 176,997 175,911 1% 177,026 179,957 Gas (Mmscfd) 61 49 24% 53 56 Non operated – Working Interest 108 - 0% 181 126 Working
Slide 29: Segment Summary – Aluminium
Segment Summary – Aluminium Q3 Q2 9M Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Alumina – Lanjigarh 404 287 41% 348 1,077 Total Aluminum Production 502 445 13% 494 1,478 Jharsuguda-I 137 116 18% 137 410 Jharsuguda-II 1 221 187 18% 216 640 245kt Korba-I 66 65
Slide 30: Aluminium profitability
Aluminium profitability $/t Q2 ‘19 2,057 51 115 2,223 (875) (764) (379) (61) $144/t (135) (247) (238) Q3 ‘19 1,971 93 2,093 (875) 29 (793) (357) (146) (225) (292) 11 79 LME Value Addition Ingot Premium Conversion & Others EBITDA Dep Other Hot metal Realisation Int Power Alumina PBT Operating costs *
Slide 31: Segment Summary – Power
Segment Summary – Power Q3 Q2 9M Production (in million units) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Total Power Sales 3,165 3,146 1% 3,514 9,995 Jharsuguda 600 MW 136 111 22% 124 424 BALCO 600 MW 438 466 (6%) 480 1,575 MALCO - - - - - HZL Wind Power 48 57 (15%) 185 372 TSPL 2,543 2,512 1% 2,7
Slide 32: Segment Summary – Power (contd.)
Segment Summary – Power (contd.) Power Generation Capacity – c. 9GW IPP: 3.6GW CPP:5.1GW • 600MW Jharsuguda (of • 1,215MW Jharsuguda 2400MW plant) • 3*600MW Jharsuguda (of 2400MW plant) • 1,980MW TSPL 41% • 540MW BALCO • 2*300MW BALCO • 270MW BALCO (of 1200MW plant) 59% • 2*300MW BALCO (of 1200 MW p
Slide 33: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q3 Q2 9M as stated) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 Sales 0.7 1.8 (63%) 0.4 2.4 Goa 0.1 1.0 (90%) 0.1 1.3 Karnataka 0.6 0.8 (28%) 0.2 1.2 Production of Saleable Ore 0.7 0.9 (28%) 1.4 3.5 Goa - 0.8 - - 0.2 Karnataka
Slide 34: Segment Summary – Copper India
Segment Summary – Copper India Q3 Q2 9M Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 Copper - Cathodes 23 101 (77%) 15 63 Tuticorin power sales (million units) - 3 - - - Financials (In Rs. crore, except as stated) Revenue 2,763 5,898 (53%) 2,376 7,936 EBITDA
Slide 35: Sales Summary
Sales Summary Sales volume Q3 FY2019 Q3 FY2018 Q2 FY2019 9M FY 2019 Zinc-India Sales Refined Zinc (kt) 187 200 160 517 Refined Lead (kt) 54 45 49 145 Total Zinc (Refined+Conc) kt 187 200 160 517 Total Lead (Refined+Conc) kt 54 45 49 145 Total Zinc-Lead (kt) 241 245 209 662 Silver (tonnes) 178 132 16
Slide 36: Sales Summary
Sales Summary Sales volume Q3 FY2019 Q3 FY2018 Q2 FY2019 9M FY2019 Sales volume Q3 FY2019 Q3 FY2018 Q2 FY2019 9M FY2019 Power Sales (mu) Iron-Ore Sales Jharsuguda 600 MW 136 111 124 424 Goa (mn DMT) 0.1 1.0 0.1 1.3 TSPL 2,543 2,512 2,725 7,624 Karnataka (mn DMT) 0.6 0.8 0.2 1.2 BALCO 600 MW 438 466
Slide 37: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of a 1 Rs depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ INR 600 crs / year Commodity prices – Impact of a 10% increase in Commodity Prices YTD Dec YTD Dec Commodity Average price EBITDA ($mn) Oil ($/bbl) 73 92 Zinc ($/t)
Slide 38: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Konkola ⚫ Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100% 100% 90% Z
Slide 39: Earnings Conference Call Details
Earnings Conference Call Details Earnings conference call is scheduled at 6:30 PM (IST) on Jan 31, 2019. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access: Earnings conference call on Jan 31, 2019 India – 6:30 PM (IST) +91 22 7115 8015 +91 22 6280 1114 Toll