Vedanta Limited · NSE:VEDL
Vedanta — Q1 FY2019 Earnings Presentation
37 slides from Vedanta's earnings presentation, July 2018
Slide 1: Channelling growth opportunities – Investor Presentation Q1 FY2019
Channelling growth Vedanta Limited opportunities opportunities VEDANTA LIMITED-OIL&GAS|ZINC&SILVER|ALUMINIUM|POWER|IRONORE|COPPER I N V E S T O R P R E S E N T A T IO N - Q 1 F Y 2 0 1 9 July 2018
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 Q1 FY2019 Review Kuldip Kaura, CEO 4 Oil & Gas Business Update Sudhir Mathur, CEO – Cairn Oil & Gas Financial Update Arun Kumar, CFO 13 Appendix 17 VEDANTA LIMITED – Q1 FY2019 INVESTOR PRESENTATION 3
Slide 4: Q1 FY2019 Review
Q1 FY2019 Review Kuldip Kaura Chief Executive Officer Sudhir Mathur CEO – Cairn Oil & Gas VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|COPPER
Slide 5: Key Highlights Q1 FY2019
Key Highlights Q1 FY2019 Operations: EBITDA mix (Q1 FY19) • Aluminium: Record production and commencement of Odisha bauxite delivery 3% Zinc 7% • Zinc India: U/G production up 7% q-o-q Oil & Gas • Zinc International: Gamsberg commercial 19% 43% Aluminium production to commence in Sept 2018 Power • O
Slide 6: Health, Safety, Environment and Sustainability
Health, Safety, Environment and Sustainability Safety LTIFR – (per million man-hours worked) • 3 fatalities in Q1 FY19 – Driving visible leadership and risk assessment & mitigation as 0.89 we stay committed to Zero Harm – 45% of employees have complied with our newly launched 0.52 0.49 0.53 0.41 0.4
Slide 7: Zinc India: Gradual ramp-up to 1.2mt MIC
Zinc India: Gradual ramp-up to 1.2mt MIC Roadmap to Phase – I of 1.35mtpa Q1 FY2019 FY18 FY20 FY21 • MIC at 212kt; refined zinc-lead at 214kt and silver at 138t Rampura Agucha UG (RA) 2.1 4.5 5.0 • Closure of open cast operations, which contributed Sindesar Khurd (SK) 4.5 6.0 6.5 57kt in Q4, while U
Slide 8: Zinc International: Gamsberg production to commence in September
Zinc International: Gamsberg production to commence in September Q1 FY2019 Results 250kt Gamsberg project • Lower production at 25kt due to planned • Mining: Ore stockpile of 0.5mt built, ahead of plant feed maintenance shutdown at Skorpion • CoP higher at $2,355/t - to trend lower • Mill commission
Slide 9: Oil & Gas: Commenced execution of $2.3bn (gross) growth projects
Oil & Gas: Commenced execution of $2.3bn (gross) growth projects Q1 FY2019 update • Higher gross production at 195 kboepd • RJ: Gross production at 164 kboepd at blended cost of $7.0/boe • 7 drilling rigs at site; to be ramped up to 14 by Q3 Key drivers to achieve 220-250 kboepd target • MBA Infill,
Slide 10: Aluminium: Record quarterly production
Aluminium: Record quarterly production Q1 FY2019 update Strategic steps towards driving higher profitability • Record aluminium production of 482kt Cost Focus • Alumina production of 325kt at CoP of $341/t vs. $487/t • Ramp-up captive alumina to 1.5-1.6mt Alumina imported alumina • Odisha bauxite to
Slide 11: ESL: Step towards integration of iron-ore business
ESL: Step towards integration of iron-ore business Acquisition rationale – ideally located asset at an attractive price • In vicinity of raw material production area, including our planned Jharkhand iron ore mines • India’s growing demand for steel Asset Details Asset turnaround strategy • Current h
Slide 12: In summary…
In summary… We are growing across businesses and reiterate FY2019 guidance Zinc India on track to gradually ramp up to 1.2mt MIC Accelerated ramp-up at Gamsberg from Sept 2018 Aluminium ramp-up on track to complete by H1 FY2019 and targeting $120-170/t savings excluding market factors as per
Slide 13: Financial Update
Financial Update Arun Kumar Chief Financial Officer VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|COPPER
Slide 14: Financial snapshot
Financial snapshot Revenue EBITDA ND/EBITDA~ Gross Debt Rs. 22,206 cr Rs. 6,529 cr 1.1x Rs. 65,161 cr Up 15% y-o-y Up 31% y-o-y Lowest among Indian peers Lower 3% y-o-y EBITDA Margin* Attributable PAT# ROCE^ EPS 34% Rs. 1,533 cr 16% Rs. 4.13 Industry leading margin Up 2% y-o-y Up 110bps y-o-y Up 2%
Slide 15: EBITDA Bridge (Q1 FY2018 vs Q1 FY2019)
EBITDA Bridge (Q1 FY2018 vs Q1 FY2019) (In Rs. crore) Aluminum 1,023 Brent 623 Zinc & Lead 575 Aluminum 283 Metal Premiums 56 Cairn 59 Others 52 Others (191) 2,329 858 151 230 358 123 6,937 329 6,529 4,985 Operational Market & Regulatory Rs. (79) crore Rs. 1,952 crore Q1 FY18 LME/ Brent / Input Curr
Slide 16: Strong Credit Profile and Balance Sheet
Strong Credit Profile and Balance Sheet Maturity Profile of Term Debt: Rs. 38,115 crore ($5.6 bn) (as of 30th June 2018) 9.5 9.8 Subsidiaries Standalone 7.9 3.5 3.8 6.1 Rs. ‘000 crore 2.0 5.7 2.7 6.3 5.7 2.1 0.7 4.1 2.0 1.6 2.2 0.5 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 & Later Term debt of Rs. 3
Slide 17: Appendix
Appendix VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|COPPER
Slide 18: FY 2019 Guidance
FY 2019 Guidance Segment FY19 Production and CoP Zinc-Lead Integrated > FY18 production ; Silver: 650 - 700 tonnes Zinc India COP: $950-975/t excluding royalty Skorpion and BMM: 150kt Zinc International Gamsberg: 100kt COP: ZI (excl Gamsberg) : $1,850 – 1,950, Gamsberg: $1,000 - $1,150/t Gross Volum
Slide 19: Income Statement
Income Statement Depreciation & Amortization Q1 Q1 Q4 In Rs. crore FY’19 FY’18 FY’18 • Higher y-o-y primarily on account of higher ore Revenue 22,206 19,342 27,630 production at Zinc, non cash impairment reversal in Q4 FY 2018 and higher volume at Oil and gas business and EBITDA 6,529 4,985 7,929 ca
Slide 20: Entity Wise Cash and Debt
Entity Wise Cash and Debt 30 June 2018 31 Mar 2018 30 June 2017 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 43,263 5,888 37,375 40,713 7,132 33,581 42,711 16,698 26.013 Standalone Cairn India Holdings 2,838 6,244 (3,406) 2,773 5,653 (2,880) 4,155 6
Slide 21: Net Debt for Q1 FY2019
Net Debt for Q1 FY2019 (In Rs. crore) FCF Post Capex Rs. (3,324) crore 4,902 29,910 2,036 274 25,008 6,112 21,958 4,824 Net Debt CF from Operations WC Movements Capex Translation & Others Net Debt Dividend paid and ESL Reported Net Debt 1st Apr 18 30th Jun 18 Acquisition 1 30th Jun 18 Note 1: Divide
Slide 22: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $5.6bn Debt Breakdown (as of 30th June 2018) (as of 30 Jun 2018) Debt breakdown as of 30 June (in $bn) (Rs. in 000’ Cr) 2018 12% Term debt 5.6 38.1 Term Loans-INR Working capital 0.8 5.5 Bonds-INR Short term borrowing 2.7
Slide 23: EBITDA Bridge (Q4 FY2018 vs. Q1 FY2019)
EBITDA Bridge (Q4 FY2018 vs. Q1 FY2019) (In Rs. crore) Aluminum 300 Zinc & lead (742) Brent 209 Copper India (510) Metal Premiums 37 Others 40 Zinc & Lead (125) Others (9) 454 88 8,645 1,212 412 62 7,929 202 702 6,529 Market & Regulatory Operational Rs. 716 crore Rs. (1,414) crore 1 Q4 FY18 LME/ Bre
Slide 24: Segment Summary – Zinc India
Segment Summary – Zinc India Q1 Q4 Full year Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2018 FY 2018 Mined metal content 212 233 (9)% 255 947 Refined Zinc – Integrated 172 194 (11)% 206 791 Refined Lead – Integrated1 42 35 20% 50 168 Refined Saleable Silver - Integrated
Slide 25: Segment Summary – Zinc International
Segment Summary – Zinc International Q1 Q4 Full year Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2018 FY 2018 Refined Zinc – Skorpion 10 14 (24)% 22 84 Mined metal content- BMM 15 18 (17)% 13 72 Total 25 32 (20)% 35 157 Financials (In Rs. crore, except as stated) Revenue
Slide 26: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q1 Q4 Full year OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY 2018 FY 2018 Average Daily Total Gross Operated Production 204,710 196,656 4% 200,032 195,150 (boepd)* Average Daily Gross Operated Production (boepd) 194,986 187,203 4% 190,172 185,587 Rajasthan 164,040
Slide 27: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q1 Q4 Full year OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY2018 FY 2018 Average Daily Production Gross operated 194,986 187,203 4% 190,172 185,587 Oil 185,914 179,892 3% 181,612 177,678 Gas (Mmscfd) 54 44 23% 51 47 Non operated – Working Interest 89 - - Working In
Slide 28: Segment Summary – Aluminium
Segment Summary – Aluminium Q1 Q4 Full year Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2018 FY 2018 Alumina – Lanjigarh 325 303 7% 351 1,209 Total Aluminum Production 482 352 37% 477 1,675 Jharsuguda-I 136 92 48% 132 440 Jharsuguda-II 1 204 120 70% 202 666 245kt Korba-I
Slide 29: Aluminium profitability
Aluminium profitability $/t Q4 ‘18 2,158 57 108 2,323 (856) (703) (410) (57) $297/t (274) (244) (221) Q1 ‘19 2,259 72 97 2,428 (840) (718) (377) (69) 425 (146) (268) 10 Other Hot EBITDA Alumina Conversion LME Power Premium Realisation Addition Dep Int PBT & others Value Metal Ingot Operating costs V
Slide 30: Segment Summary – Power
Segment Summary – Power Q1 Q4 Full year Production (in million units) FY 2019 FY 2018 % change YoY FY2018 FY 2018 Total Power Sales 3,315 1,838 80% 3,109 11,041 Jharsuguda 600 MW 164 564 (71)% 404 1,172 BALCO 600 MW 656 551 19% 388 1,536 MALCO - 4 - - 4 HZL Wind Power 139 156 (11)% 58 414 TSPL 2,355
Slide 31: 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 (of • 270MW BALCO 1200MW plant) 59% • 2*300MW BALCO (of 1200 MW p
Slide 32: Segment Summary – Iron Ore / Steel (Others)
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q1 Q4 Full year as stated) FY 2019 FY 2018 % change YoY FY 2018 FY 2018 Sales 1.4 2.3 (39)% 2.7 7.6 Goa 1.0 1.9 (44)% 2.4 5.4 Karnataka 0.4 0.4 (15)% 0.3 2.2 Production of Saleable Ore 1.4 3.2 (56)% 1.7 7.1 Goa 0.2 2.2 (89)% 1.
Slide 33: Segment Summary – Copper India
Segment Summary – Copper India Q1 Q4 Full year Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY 2018 FY 2018 Copper - Cathodes 24 90 (73)% 106 403 Tuticorin power sales (million units) - 30 - 2 39 Financials (In Rs. crore, except as stated) Revenue 2,797 5,322 (47)% 7,518 24
Slide 34: Sales Summary
Sales Summary Sales volume Q1 FY2019 Q1 FY2018 Q4 FY2018 FY 2018 Zinc-India Sales Refined Zinc (kt) 170 190 210 793 Refined Lead (kt) 42 34 50 169 Total Zinc (Refined+Conc) kt 170 190 210 793 Total Lead (Refined+Conc) kt 42 34 50 169 Total Zinc-Lead (kt) 212 224 259 961 Silver (moz) 4.5 3.6 5.4 17.9
Slide 35: Sales Summary
Sales Summary Sales volume Q1 FY2019 Q1 FY2018 Q4 FY2018 FY 2018 Sales volume Q1 FY2019 Q1 FY2018 Q4 FY2018 FY 2018 Power Sales (mu) Iron-Ore Sales Jharsuguda 600 MW 164 564 404 1,172 Goa (mn DMT) 1.0 1.9 2.4 5.4 TSPL 2,355 563 2,258 7,915 Karnataka (mn DMT) 0.4 0.4 0.3 2.2 BALCO 600 MW 656 551 388
Slide 36: 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 37: Earnings Conference Call Details
Earnings Conference Call Details Earnings conference call is scheduled at 6:30 PM (IST) on July 31, 2018. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access: Earnings conference call on July 31, 2018 India – 6:30 PM (IST) +91 22 7115 8015 +91 22 6280 1114 Tol