Vedanta Resources — H1 FY2024 Earnings Presentation
35 slides from Vedanta Resources's earnings presentation, Dec 14, 2023
Slide 1: Earnings Presentation 1HFY24
EARNINGS PRESENTATION 1HFY24 VEDANTA RESOURCES 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 and Finance Update
VEDANTA RESOURCES LIMITED EARNINGS PRESENTATION 1HFY24 Business and Finance Update 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 16.1 million $ 27.4 million 5700+ Highlights Total Beneficiaries CSR Spend in 1HFY24 Operational Nandghar Healthcare Drinking water > $225 million spent on > 30 Initiatives and sanitation CSR activities since 2020 > 15 Initiatives $ million 54 57 Community
Slide 6: Resilient operational performance backed by aggressive cost reduction
1HFY24 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 7: Vedanta Limited announced demerger into 6 different entities
Strategic Update (1/2) 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 ▪ Inc
Slide 8: Significant cost reduction across key businesses
Operational Update 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% re
Slide 9: Aluminium Business: Focused on growth and business integration
Aluminium Business Focused on growth and business integration Aluminium Production (kt) Half Yearly Highlights: ▪ Highest ever Aluminium production up 2% y-o-y 1,149 1,173 +2% y-o-y ▪ Highest ever production run rate ▪ Aluminium CoP lower by 26% y-o-y o Lower input commodity cost o Higher operationa
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
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: ▪ Half yearly CoP decreased 7% y-o-y due to better operational a) Fumer b) RD Mill c) HZAPL and buying efficiency
Slide 13: Zinc International
Zinc International Strong focus on production enhancement and cost reduction Total MIC Production Key highlights: Gamsberg (kt) BMM (kt) ▪ Half yearly production at BMM increased 11% y-o-y 33 -3% q-o-q 37 108 ▪ 1HFY24 Gamsberg COP (ex TcRc) improved by 4% y-o-y 80 97 60 19 19 18 ▪ Highest plant avai
Slide 14: Oil & Gas
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
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
FACOR Aim to become the largest ferrochrome producer in India FACOR – Quarterly Highlights FACOR – Growth Project Phase 1 Key Highlights Objective: ▪ Half yearly Ferrochrome production at 31 kt, up 7% YoY ▪ Ferrochrome capacity expansion by 300 KTPA ▪ 2QFY24 margin improved to 195$/t driven by highe
Slide 17: Finance Update
VEDANTA RESOURCES LIMITED EARNINGS PRESENTATION 1HFY24 Finance Update Sensitivity: Internal (C3)
Slide 18: 1HFY24 financial snapshot
1HFY24 financial snapshot REVENUE EBITDA EBITDA Margin1 $ 8,722 million $ 2,460 million 33% 2nd highest ever 1H 1% y-o-y Robust EBITDA margin ROCE2 FCF (Pre-capex)3 Net Debt/EBITDA 22% $ 913 million 2.7x Strong double digit 37% y-o-y vs 2.8x in FY23 19 1. Excludes custom smelting at Copper Busin
Slide 19: EBITDA Bridge (1HFY24 vs. 1HFY23)
EBITDA BRIDGE (1HFY24 vs. 1HFY23) (In $ mn) 24% vs Rebased EBITDA Alum (455) Zinc (415) ESL (63) Oil & Gas (124) Market & Regulatory $ (510) Mn 20 Ex rate: 1HFY24 ₹ 82.42 VS 1HFY23 ₹ 78.38 Vedanta Resources Limited Note: Others include impact of favorable arbitration award in Oil and Gas Business 1H
Slide 20: Net Debt Walk 1HFY24
Net Debt Walk 1HFY24 (In $mn) FCF post Capex $ 269 million 21 Vedanta Resources Limited 1HFY24 Investor Presentation Sensitivity: Internal (C3)
Slide 21: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA Debt breakdown Gross Debt In $bn 3.3 3.0 2.8 2.8 Term debt 13.57 2.7 1.9 Working capital 0.19 Short term borrowing 0.91 Total consolidated debt 14.67 FY19 FY20 FY21 FY22 FY23 1HFY24 Cash and Cash Equivalents 2.16 ▪ Liquidity: Cash and Cash Equivalen
Slide 22: FY24 key priorities
FY24 key priorities Deliver on target volume growth across businesses Strive for timely completion of capex projects Focus on integrated Aluminum operations to reduce impact on market volatility Continued focus on sustainable shareholder Reduce costs to sustain and improve margins value creation Imp
Slide 23: Continued disciplined investment in value adding growth
Continued disciplined investment in value adding growth ($ 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 0.2 0.1 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 24: Appendix
VEDANTA LIMITED EARNINGS PRESENTATION 1HFY24 Appendix Sensitivity: Internal (C3)
Slide 25: 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 26: Income statement
Income statement In $ Mn 1HFY24 1HFY23 ▪ Depreciation & Amortization: lower by 5% y-o-y largely Revenue from operations 8,722 9,523 due to lower production and depletion charge at Oil & Gas Business. EBITDA 2,460 2,487 Depreciation & amortization (614) (648) Exploration cost written off (66) (13) ▪
Slide 27: 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 28: Entity-wise Cash and Debt
Entity-wise Cash and Debt (In $ mn) Sep 30, 2023 Mar 31, 2023 Company Cash & Cash Cash & Cash Debt Net Debt Debt Net Debt Eq Eq Vedanta Limited Standalone 5,109 236 4,873 5,114 896 4,218 Cairn India Holdings Limited1 316 219 97 324 196 128 Zinc India 1,361 1,350 11 1,441 1,206 235 Zinc International
Slide 29: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $13.6 Bn Long Term Debt Maturities : $13.6 bn (as of Sep 30, 2023) (as on Sep 30, 2023) Standalone Subsidiaries 9% 5.0 In $ Bn Bonds INR 4.6 28% Term Loan INR Term Loan Fx 38% Bonds Fx 1.7 1.9 2.1 4.1 2.9 25%
Slide 30: Segment summary
Segment summary Half Year Half Year Aluminium (in ’000 tonnes, or as Zinc India (in ’000 tonnes, or as stated) 1HFY24 1HFY23 stated) 1HFY24 1HFY23 Mined metal content 509 507 Integrated metal 501 506 Alumina – Lanjigarh 859 939 Refined Zinc – Integrated 394 395 Total Aluminum Production 1,173 1149 R
Slide 31: Segment summary- continue
Segment summary- continue Half Year Half Year Oil and Gas (boepd) Steel (in ‘000 tonnes, or as stated) 1HFY24 1HFY23 1HFY24 1HFY23 Average Daily Gross Operated Production Total Production 702 593 134,477 144,267 Pig Iron 124 80 (boepd) Rajasthan 112,066 124,291 Billet Production 495 431 Ravva 11,259
Slide 32: Sales summary
Sales summary Half Year Half Year Sales volume Half Year Sales volume Sales volume 1HFY24 1HFY23 1HFY24 1HFY23 Power Sales (mu) 1HFY24 1HFY23 Zinc-India Sales Iron ore sales Jharsuguda 1124 1471 Refined Zinc (kt) 393 395 Goa (mn dmt) 0.1 0.4 TSPL 5625 5433 Refined Lead (kt) 107 110 Karnataka (mn dmt
Slide 33: 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 34: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ $ 20 mn/ half year Commodity prices – Impact of a 10% increase in Commodity Prices 1HFY24 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 83 33 Zinc ($/t) 2,
Slide 35: 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