Vedanta Limited · NSE:VEDL
Vedanta — Sesa Sterlite — Q2 FY2015 Earnings Presentation
31 slides from Vedanta's earnings presentation, Oct 29, 2014
Slide 1: Q2 FY2015 Results Presentation
Q2 FY2015 Results Presentation 29 October 2014
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived future integration of acquired businesses; and from from publicly available sources that have not been numerous other matters of national, regional and global independently verified. scale, including those o
Slide 3: Overview
Overview Tom Albanese Chief Executive Officer
Slide 4: Q2 FY2015 Results Highlights
Q2 FY2015 Results Highlights Operations EBITDA Mix Improving production rate at Zinc-India, Copper- Copper Iron Ore 7% 2% India, Oil & Gas Power 4% Zinc-India: Mined metal improving as per mine-plan; H2 output to be significantly higher Aluminium Oil & Gas: RJ production normalised after 9% pl
Slide 5: CEO’s Priorities: Building Momentum
CEO’s Priorities: Building Momentum Safety: Focus on eliminating fatalities Enhance performance of well-performing assets: Zinc India: Optimizing production and transition to underground at Rampura Agucha; sustaining lowest quartile costs Zinc Intl.: Gamsberg-Skorpion integrated zinc project rev
Slide 6: Sustainability: Integral to our Business
Sustainability: Integral to our Business Safety Focus on bringing in a culture of zero-harm Environment Significant investments (Rs.338 crore+ over last 3years) Signed WBCSD Pledge for access to safe Water, Sanitation and Hygiene (WASH) Partnering with IUCN – Cairn India and BMM Stakeholder
Slide 7: India: Strong winds of change for economic growth
India: Strong winds of change for economic growth New government with overwhelming majority on a Strong Market Outperformance mandate of economic growth and job creation NIFTY FTSE-100 S&P 500 MSCI EM Index “Make in India” – Mr. Modi, Prime Minister of India 140 Governance: Focus on improving
Slide 8: India: Regulatory Framework and Headway
India: Regulatory Framework and Headway Oil & Gas Government prioritizing energy security: Gas pricing policy announced “[The Prime Minister] o New incentive regime - evaluating revenue sharing models has already asked us to o Uniform licensing policy for hydrocarbon reserves delete the word del
Slide 9: India: Attractive Fundamentals
India: Attractive Fundamentals Steel Consumption Intensity: Low, High growth phase Steel consumption per capita (in tonnes) vs. GDP per capita (in USD thousands) Indian economy: Key differentiators Thousands 1.2 South Korea 1 Domestic-demand driven: lesser effect of Steel (tonnes per capita) globa
Slide 10: Financial Review
Financial Review D.D. Jalan Chief Financial Officer
Slide 11: Financial Highlights
Financial Highlights Continued strong EBITDA margins driven by diversified portfolio despite commodity price volatility Attributable PAT increased by 15% yoy and sequentially by 24% Gross debt reduced by Rs.1,000 crores in the last 6 months Interim Dividend of Rs.1.75/share Q2 FY2014 Rs. Cro
Slide 12: EBITDA Bridge
EBITDA Bridge Q2 FY2015 vs. Q2 FY2014 Rs. (270) cr – Lower production at Zinc India as per mine plan (In Rs. Crore) Rs. (170) cr – Lower production at Zinc Intl Rs. (200) cr – Oil & gas (includes planned shutdown at MPT) Rs. 70 cr – Copper India and Power Rs.150 cr – Higher coal costs 69 99 844 318
Slide 13: Income Statement – Variances
Income Statement – Variances In Rs. Crore Q2 Q2 FY2014 Q1 or as stated FY2015 (Proforma) FY2015 Higher other income at Zinc India and Cairn India, driven by FMP maturities EBITDA 6,381 6,955 5,670 during the quarter Finance Cost 1,471 1,473 1,537 Other Income 686 459 1,210 Stable finance cost De
Slide 14: Well-Invested Assets Driving Cash Flow Growth
Well-Invested Assets Driving Cash Flow Growth Cash Flow and Growth Capex Profile - $bn Positive Cash Flow from Operations with production ramp-up Oil & Gas Capex² Zinc Capex M&M Capex Free Cash Flow³ $1.6bn free cash flow (post growth 3.0 capex) in FY2014 Unspent Capex up to FY20171: $3.8bn
Slide 15: Maturity Profile
Maturity Profile Term Debt Maturity Profile (in $bn) (as of 30 September 2014) Debt breakdown (in $bn) External term debt 7.9 Standalone ($4.5bn) Subsidiaries ($3.4bn) Working capital 2.3 Short term debt, majority to be rolled 0.7 over 0.9 Inter company loan from VED 2.7 0.5 0.5 $0.7bn: FCCB due end
Slide 16: Business Review
Business Review Tom Albanese Chief Executive Officer
Slide 17: Oil & Gas
Oil & Gas Q2 Results Rajasthan Block - 36 discoveries Q2 production lower Shakti Production normalized after planned shutdown at MPT Bhagyam Shakti NE Temporary stoppage of Ravva gas sales due to N-I North N-C-West-A customer pipeline outage, now restarted DP-1 Well intervention measures res
Slide 18: Oil & Gas: Rajasthan Development – Near Term Focus
Oil & Gas: Rajasthan Development – Near Term Focus Rajasthan Ramp-up Plan RJ Block - multiple formations, play types MBA Akli BH + Satellite fields Gas 10 – 20 Thumbli 10 – 30 Dharvi Dungar 180 – 200 Barmer Hill Fategarh FY14 FY15(E) FY16(E) FY17(E) Volcanics MBA fields: Targeting c.50% recovery F
Slide 19: Zinc India: Brownfield Expansion
Zinc India: Brownfield Expansion Q2 Results Rampura Agucha Mine – Isometric View Q2 mined metal 30% higher than Q1 as per plan Refined metal lower due to lower concentrate feed and smelter shutdown Maintained lowest quartile cost position On track for marginally higher mined metal production
Slide 20: Zinc International
Zinc International Q2 Results BMM – Shaft Headgear Replace with Map Skorpion: Refined zinc lower due to equipment availability issues BMM: Lower mined metal due to lower ore & grades and challenges in equipment availability Gamsberg-Skorpion Zinc Complex: 250ktpa Gamsberg open-pit project – Fe
Slide 21: Aluminium: Ramping up capacity
Aluminium: Ramping up capacity Q2 Results Aluminium Costs and Margins Smelters delivered high operating efficiencies (in $/t, for Q2FY2015) despite incidences of grid failures Coal availability: lower e-auction volumes, rail 383 92 2,463 Captive bauxite can constraints 1,987 significantly reduce
Slide 22: Other Assets: Significant part of the portfolio
Other Assets: Significant part of the portfolio Power Jharsuguda 2,400MW: 34% PLF in Q2, operational and evacuation constraints TSPL: 1st unit being commissioned, reliability run in Q3 Flooding due to breach of irrigation canal, durable solution being implemented Copper India/Australia Tutic
Slide 23: Building Momentum: Key Strategic Priorities unchanged
Building Momentum: Key Strategic Priorities unchanged Disciplined capital allocation: Low-risk, phased development (Zinc, Oil & Gas) Production growth across portfolio with a focus on Sustained operational excellence and cost efficiencies returns Active engagement with Governments Production
Slide 24: Appendix
SS sesasterlite a vedanta company Appendix
Slide 25: Segment Wise Summary
Segment Wise Summary Oil & Gas Q2FY2014 Q2FY2015 Zinc-India Q2FY2014 Q2FY2015 Average Daily Gross Operated Mined Metal (kt) 222 213 213,299 194,508 Production (boepd) Refined Zinc – Integrated (kt) 195 174 Rajasthan 175,478 163,262 Refined Lead – Integrated (kt)1 29 26 Ravva 29,151 20,596 Saleable S
Slide 26: Segment Wise Summary contd.
Segment Wise Summary contd. Power Q2FY2014 Q2FY2015 Iron Ore and Pig Iron Q2FY2014 Q2FY2015 Power Sales (mu) 1,910 2,028 Sales (mt) - 0.6 Jharsuguda 2,400 MW 1,494 1,653 Goa - - BALCO 270MW 44 1 Karnataka - 0.6 MALCO 221 204 Production - 0.3 Goa - - HZL Wind Power 151 170 Karnataka - 0.3 Power Reali
Slide 27: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 30 June 2014 30 September 2014 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Sesa Sterlite Standalone 39,883 2,489 37,394 40,187 3,143 37,044 Zinc India - 24,611 (24,611) - 25,412 (25,412) Zinc International - 965 (965) - 1,169 (1,169) Cairn India 3
Slide 28: Project Capex
Project Capex Capex Spent up to Spent in H1 Unspent as at Capex in Progress Completion Time (US$mn) March 2014 FY2015 30.9.2014 Cairn India Phase wise completion 3,030 - 601 2,429 Total Capex Oil & Gas 3,030 - 601 2,429 Aluminium Sector BALCO – Korba-III 325 ktpa Smelter and Smelter: 84 post capital
Slide 29: Project Capex
Project Capex Capex Spent up to Spent in H1 Unspent as at Enabling Capex Completion Time (US$mn) March 2014 FY2015 30.9.2014 Zinc International- Gamsberg 29 23 5 1 Western Cluster- Liberia 106 96 6 4 Total Enabling Capex 135 119 11 5 Capex Spent up to Spent in H1 Unspent as at Capex in Optionality C
Slide 30: Sales Summary
Sales Summary Sales volume H1 FY2014 H1 FY2015 Sales volume H1 FY2014 H1 FY2015 Zinc-India Sales Iron-Ore Sales Refined Zinc (kt) 368 320 Goa (mn DMT) - - Refined Lead (kt) 61 62 Karnataka (mn DMT)1 0.0 1.2 Zinc Concentrate (DMT) - - Total (mn DMT) 0.0 1.2 Lead Concentrate (DMT) - - MetCoke (kt) 198
Slide 31: Group Structure
Group Structure Vedanta Resources Plc Divisions of Sesa Sterlite 79.4% 62.5% Iron Ore (Sesa Goa) Konkola Copper Smelting (Tuticorin) Copper Sesa Sterlite Mines (KCM) Power (2,400 MW Jharsuguda) Aluminium (VAL aluminium and power assets) Subsidiaries of Sesa Sterlite 59.9% 64.9% 51% 100% 100%