Slide 1: Vedanta Limited Q2 FY2018 Results
Vedanta Limited Q2 FY2018 Results 2 November 2017 Elements for a Sustainable Future VEDANTA LIMITED – OIL & GAS | ZINC | POWER | ALUMINIUM | IRON ORE | COPPER VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION
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 Strategic Update Kuldip Kaura, CEO 4 Financial Update Arun Kumar, CFO 9 Kuldip Kaura, CEO Business Review 17 Sudhir Mathur, Acting CEO - Cairn Oil & Gas Appendix 26 VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION 3
Slide 4: Strategic Update
Vedanta Limited Q2 FY2018 Results 2 November 2017 Strategic Update Kuldip Kaura Chief Executive Officer Value Creation VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION
Slide 5: Sustainable Development – Focused on Building a Zero Harm Culture
Sustainable Development – Focused on Building a Zero Harm Culture Safety LTIFR – (per million man-hours worked) Regrettably 2 fatalities from 2 incidents during H1 FY18 0.89 High Potential (HIPO) Incident reduced by 46% in H1 Reinvigorated Leadership Action Program initiated towards 0.52 0.4
Slide 6: Q2 FY2018 Results Highlights
Q2 FY2018 Results Highlights Operations: Record volumes with ramp-up on track EBITDA mix High zinc-lead and record silver volume at Zinc India Q2 FY2018 7% Highest quarterly production at BMM in last 4 years; 6% Gamsberg on track for mid CY18 production 8% Aluminium smelters continue ramp up,
Slide 7: Diversified resources company with attractive commodity mix
A diversified resources company with an attractive commodity mix, market leading growth and strong balance sheet Commodity diversification1 Attractive commodity mix Global demand CAGR 2017-30E Aluminium 2.8% 87% of O&G India 2.2% Vedanta’s Lead 2.2% Q2 FY18 EBITDA Zinc 2.0% Peers2 Nickel 1.6% Copper
Slide 8: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Shareholder Returns Maintain Strong Balance Sheet Grow Existing Businesses • Announced dividend policy at • Cont
Slide 9: Financial Update
Vedanta Limited Q2 FY2018 Results 2 November 2017 Financial Update Arun Kumar Chief Financial Officer Empowering Growth VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION
Slide 10: Q2 Financial Highlights
Q2 Financial Highlights EBITDA higher 24% y-o-y and 16% q-o-q, driven by higher production volumes and higher commodity prices partially offset by input commodity inflation Gross Debt reduced by Rs. 11,466 crore1 in H1 FY2018 Rs. crore or as stated Q2 FY2018 Q2 FY2017 Change Q1 FY2018 Change EBI
Slide 11: EBITDA Bridge (Q2 FY2018 vs. Q1 FY2018)
EBITDA Bridge (Q2 FY2018 vs. Q1 FY2018) Q2 FY2018 vs. Q1 FY2018 (In Rs. crore) Zinc & Lead 538 Aluminum 236 Zinc India 168 Brent 58 Aluminum 121 Brent Discount (51) TSPL 344 Metal Premium (72) Others (11) Iron ore (18) Rupee (41) ZAR & NAD 6 7,000 622 29 271 6,000 692 100 5,776 35 12 5,454 80 4,965
Slide 12: Income Statement
Income Statement In Rs. crore Q2 Q2 Q1 Depreciation & Amortization FY’18 FY’17 FY’18 − Marginally higher q-o-q on account of higher Revenue 21,520 15,665 18,203 production at Zinc India and capitalization of pots at EBITDA 5,776 4,647 4,965 Aluminium business Depreciation & amortisation (1,426) (1
Slide 13: Net Debt for Q2 FY2018
Net Debt for Q2 FY2018 (In Rs. crore) 20,000 4,594 19,024 18,000 1,448 152 15,592 16,000 134 14,000 12,000 FCF Post Capex Rs. 3280 crore 10,000 8,000 6,000 Net Debt CF from Operations WC Movements Capex Translation & Others Net Debt 30th Jun 17 30th Sep 17 VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENT
Slide 14: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Prioritised capital to high-return, low-risk projects to Growth Capex Profile and Free Cash Flow pre capex - $bn maximize cash flows 2.8 Oil & Gas Zinc H1 Capex spent $0.3bn, H2 FY 2017 expected at 2.4 Al & Power $0.8bn Copper Optionality Capex Re
Slide 15: Gross Debt Reduction of Rs. 11,466 Crore since March 2017
Gross Debt Reduction of Rs. 11,466 Crore* since March 2017 Consolidated Gross debt* trend since March 2017 Rs. ‘000 Crore 63.7 57.4 52.2 Mar'17 June'17 Sep'17 Continued focus on gross debt reduction Reduced debt by Rs. 11,466 cr* during H1 FY2018 HZL temporary borrowing paid down by Rs. 7,315 cr
Slide 16: Financial Priorities
Financial Priorities: Strong shareholder returns while continuing to strengthen Balance Sheet Disciplined Capital Continued focus on generating cash flows from ramp up of assets Allocation; Optimization of opex focus on FCF Further enhance credit rating to AA+ Deleveraging; Continued reducti
Slide 17: Business Review
Vedanta Limited Q2 FY2018 Results 2 November 2017 Business Review Kuldip Kaura, Chief Executive Officer Sudhir Mathur, Acting CEO – Cairn Oil & Gas Operational Excellence VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION
Slide 18: Zinc India
Zinc India Q2 FY2018 Results MIC at 219kt; refined zinc-lead production at 230kt Refined silver production at a record high of 140 tonnes CoP at $984/t; impacted by high input commodity prices Projects – key highlights Capacity expansion to 1.2mtpa MIC by FY2020 on track RAM U/G mine main
Slide 19: Zinc International
Zinc International Q2 FY2018 Results Significant progress at 250kt Gamsberg project Total production at 42kt: On target for first production by mid CY2018, with ramp-up to its Skorpion at 23kt: highest in last 3 quarters full mining capacity in the next 9-12 months following full mobilization
Slide 20: Cairn Oil & Gas
Cairn Oil & Gas Q2 FY 2018 Results MPT: Facility modifications Gross average production at 180,955 boepd Rajasthan production at 153,238 boepd Offshore production at 27,718 boepd Commenced 15 wells infill drilling campaign at Mangala with first well brought in Sept 2017; 4 wells online curre
Slide 21: Cairn Oil & Gas – Key Projects
Cairn Oil & Gas Key Projects MPT: Facility modifications Exploration Rajasthan: Studies contract awarded for Shallow Oil and Deep Gas prospects. Tendering underway for integrated exploration and appraisal drilling campaign KG Offshore: 2 wells exploration program to commence from Q4FY18; Contrac
Slide 22: Aluminium
Aluminium Q2 FY2018 Results Aluminium Costs and Margins (in $/t, for Q2 FY2018) Record Aluminium production of 401kt and Alumina 269kt Q1 ‘18 1909 98 62 2,070 (745) (607) (373) (72) $271/t (172) (339) (240) Aluminum CoP at $1,857/t, higher q-o-q due to high 2,012 78 63 2,153 (718) power cost on
Slide 23: Power
Power Talwandi Sabo Power Limited (TSPL) Other IPPs 1,980 MW Thermal Power Plant (3 units of 660 BALCO 600MW: Q2 PLF of 27% on account of MW each) temporary coal shortage Plant availability of 87% in the quarter; Targeting Jharsuguda 600MW: Low PLF of 7%. Impacted due to the shut down of the
Slide 24: Iron Ore and Copper India
Iron Ore and Copper India Q2 FY2018 Results Iron Ore Volumes: Sales of 0.7mt and production of 1.2mt (Goa and Karnataka) Lower production and sales on a q-o-q basis due to monsoons Karnataka to achieve full allocation production in Q3 FY2018 production allocation: 5.5mtpa at Goa & 2.3mtpa at
Slide 25: Strategic Priorities
Strategic Priorities Production Growth and Asset optimisation Optimise Capital Allocation and Maintain Strong Balance Sheet Protect and preserve our License to Operate Identify next generation of Resources VEDANTA LIMITED – Q2 FY2018 RESULTS PRESENTATION 25
Slide 26: Appendix
Vedanta Limited Q2 FY2018 Results 2 November 2017 Appendix
Slide 27: Guidance
Guidance Segment FY18e Comments Earlier guidance on CoP for FY2018 was Zinc-Lead Integrated: 950kt marginally higher than FY17 CoP. Zinc India Silver volume: +500 tonnes Revised guidance due to input CoP ($/t): $900-950/t commodity inflation Zinc-Lead volume: c.160kt Zinc International Gamsberg expe
Slide 28: Project Capex
Project Capex Spent up Capex to Mar Spent in H1 Unspent as at Capex in Progress Status ($mn) 2017 FY2018 30 Sept 171 Cairn India – Mangala Infill, Liquid handling, 306 56 22 228 Bhagyam & Aishwariya EOR, Tight Oil & Gas etc Aluminium Sector BALCO – Korba-II 325ktpa Smelter and Smelter: fully operati
Slide 29: EBITDA Bridge (Q2 FY2018 vs. Q2 FY2017)
EBITDA Bridge (Q2 FY2018 vs. Q2 FY2017) Q2 FY2018 vs. Q2 FY2017 Zinc India 611 Zinc & Lead 989 (In Rs. crore) Aluminum 231 Aluminum 964 Cairn (136) Brent 216 Others 57 Brent Discount (80) Rupee (417) Power 33 Metal Premium (38) ZAR/NAD (14) 7,000 Iron ore (103) 648 1,948 797 185 281 434 5,776 6,000
Slide 30: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. crore) 30 Sept 2017 30 June 2017 30 Sept 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 38,232 12,375 25,857 42,711 16,698 26,013 41,285 2,114 39,171 Standalone Cairn India1 NA NA NA NA NA NA 0 24,339 (24,339) Ca
Slide 31: Strong Credit Profile and Balance Sheet at VEDL
Strong Credit Profile and Balance Sheet at VEDL Maturity Profile of Term Debt (Rs.36,927 Crore) (as of 30th Sept 2017) 8.4 Subsidiaries Standalone 6.8 6.4 3.2 6.5 2.2 2.3 4.5 Rs. ‘000 Crore 4.3 3.8 0.7 2.2 5.2 4.6 4.1 3.6 2.3 2.7 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 & Later Term debt of Rs. 36,
Slide 32: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $5.7bn Debt Breakdown (as of 30th Sept 2017) (as of 30 Sept 2017) 1% Debt breakdown as of 30 Sep 12% (in $bn) 2017 Term Loans-INR Term debt 5.7 Bonds-INR Working capital 0.1 47% Term Loans-USD Short term borrowing 2.1 40%
Slide 33: Segment Summary – Zinc India
Segment Summary – Zinc India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Mined metal content 219 192 14% 233 452 318 42% Refined Zinc – Total 192 150 28% 194 386 252 53% Refined Zinc – Integrated 192 149 29% 194 386 250 54% Refi
Slide 34: Segment Summary – Zinc International
Segment Summary – Zinc International Q2 Q1 H1 Production (in’000 tonnes, or as stated) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Refined Zinc – Skorpion 23 23 0% 14 36 47 -22% Mined metal content- BMM 20 16 23% 18 38 35 8% Mined metal content- Lisheen - - - - - - - Total 42 39
Slide 35: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q2 Q1 H1 OIL AND GAS (boepd) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Average Daily Total Gross Operated Production 190,389 206,230 -8% 196,656 193,505 206,342 -6% (boepd)* Average Daily Gross Operated Production (boepd) 180,955 196,399 -8% 187,203
Slide 36: Segment Summary – Oil & Gas (contd.)
Segment Summary – Oil & Gas (contd.) Q2 Q1 H1 OIL AND GAS (boepd) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Average Daily Production Gross operated 180,955 196,399 -8% 187,203 184,062 196,629 -6% Oil 173,408 189,873 -9% 179,892 176,632 190,088 -7% Gas 45.3 39.2 16% 43.9 44.6 3
Slide 37: Segment Summary – Aluminium
Segment Summary – Aluminium Q2 Q1 H1 Particulars (in’000 tonnes, or as stated) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Alumina – Lanjigarh 269 292 (8)% 303 572 567 1% Total Aluminium Production 401 296 36% 352 753 541 39% Jharsuguda-I 99 132 (25)% 92 191 261 (27)% 1 Jharsugu
Slide 38: Segment Summary – Power
Segment Summary – Power Q2 Q1 H1 Particulars (in million units) % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 % change YoY YoY Total Power Sales 2,950 3,030 (3)% 1,838 4,787 6,039 -21% Jharsuguda 600 MW 93 605 (85)% 564 657 1,497 -56% BALCO 600 MW 132 549 (76)% 551 682 1,156 -41% MALCO 0 25 - 4 4
Slide 39: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q2 Q1 H1 Particulars (in million dry metric tonnes, or as stated) % change % change FY 2018 FY 2017 FY2018 FY 2018 FY 2017 YoY YoY Sales 0.7 0.8 (7)% 2.3 3.0 3.4 (12)% Goa 0.1 0.3 (59)% 1.9 2.0 2.4 (18)% Karnataka 0.6 0.5 30% 0.4 1.0 1.0 3% Production of Saleable Ore 1.2 1
Slide 40: Segment Summary – Copper India
Segment Summary – Copper India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) % change % change FY 2018 FY 2017 FY 2018 FY 2018 FY 2017 YoY YoY Copper - Cathodes 106 97 9% 90 197 198 (1)% Tuticorin power sales (million units) 4 30 (86)% 30 34 90 (62)% Financials (In Rs. crore, except as stated)
Slide 41: 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 • 1,980MW TSPL 2400MW plant) • 2*300MW BALCO (of 41% • 540MW BALCO 1200MW plant) • 270MW BALCO 59% • 274MW HZL Wind Power • 2*30
Slide 42: Sales Summary
Sales Summary Sales volume Q2 FY2018 H1FY2018 Q2 FY 2017 H1 2017 Q1 FY2018 Zinc-India Sales Refined Zinc (kt) 193 383 148 268 190 Refined Lead (kt) 39 73 32 55 34 Zinc Concentrate (DMT) - - - - - Lead Concentrate (DMT) - - - - - Total Zinc (Refined+Conc) kt 193 383 148 268 190 Total Lead (Refined+Co
Slide 43: Sales Summary
Sales Summary Sales volume H1 Q2 H1 Q1 Q2 FY H1FY Q2 FY H1 FY Q1 Q2 FY2018 Sales volume Power Sales (mu) FY2018 FY2017 FY2017 FY2018 2018 2018 2017 2017 FY2018 Jharsuguda 600 MW 93 657 605 1497 564 Iron-Ore Sales TSPL 2582 3145 1679 2951 563 Goa (mn DMT) 0.1 2.0 0.3 2.4 1.9 BALCO 270 MW - - - - - Ka
Slide 44: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper (Tuticorin) Konkola Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100
Slide 45: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:30 PM (IST) on Thursday, 2 November 2017. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access Earnings conference call on November India – 6:30 PM (IST) +91 22 3938 1017 2, 2017 Toll Fre