Sesa Sterlite Limited: Hindustan Zinc Limited: Results for the Fourth Quarter and Full Year Ended March 31, 2015
MUMBAI, India, April 20, 2015 /PRNewswire/ --
The following release was issued today by Sesa Sterlite Limited's subsidiary Hindustan Zinc Limited.
(Logo: http://photos.prnewswire.com/prnh/20140117/663814 )
Hindustan Zinc Limited
Results for the Fourth Quarter and Full Year Ended March 31, 2015
"Record mined metal production; EBITDA up 7%"
Highlights for the year
Operational Performance
- Record mined metal production of 887kt
Financial Performance
- EBITDA up 7% to Rs. 7,420 Crore, the highest ever
- Net Profit up 18% to Rs. 8,178 Crore, the highest ever
Reserve & Resource
- Total R&R of 375.1 million MT, a net addition of 10 million MT
Dividend
- Final dividend of 125%, taking the total dividend for the year to 220%, the highest ever
Highlights for the quarter
- Record mined metal production of 269kt - up 34% y-o-y
- Record integrated zinc and lead metal production - up 21% and 14% y-o-y respectively
- EBITDA up 14% to Rs. 1,978
- Net Profit up 6% to Rs. 1,997
Hindustan Zinc Limited today announced its results for the fourth quarter and full year ended March 31, 2015.
Mr. Agnivesh Agarwal, Chairman -
"In our golden jubilee year, we have delivered our best ever performance. The year witnessed favourable zinc market dynamics with falling mine surplus coupled with strong demand, which is likely to boost the price of zinc in coming years too. Another noteworthy event during the year was the enactment of new MMDRA Act 2015, which will bring greater transparency in granting of mineral concessions."
Financial Summary
(In Rs. Crore, except as stated)
Financial Year ended 31
Particulars Q4 Q3 March
2015 2014 Change 2015 2015 2014 Change
Net Sales/Income from
Operations
Zinc 3,206 2,591 24% 2,994 11,096 9,797 13%
Lead 470 536 -12% 419 1,784 1,743 2%
Silver 273 375 -27% 283 1,187 1,503 -21%
Others 124 87 43% 108 522 416 26%
Total 4,073 3,589 13% 3,804 14,589 13,459 8%
EBITDA 1,978 1,736 14% 2,089 7,420 6,913 7%
Profit After Taxes 1,997 1,881 6% 2,379 8,178 6,905 18%
Earnings per Share (Rs.) 4.73 4.45 6% 5.63 19.35 16.34 18%
Mined Metal Production ('000
MT) 269 200 34% 242 887 880 1%
Refined Metal Production
('000 MT)
Total Refined Zinc 217 182 19% 196 734 749 -2%
- Refined Zinc - Integrated 217 179 21% 192 721 743 -3%
Total Saleable Refined
Lead[1] 36 36 - 30 127 123 4%
- Saleable Lead - Integrated 33 29 14% 25 105 111 -5%
Total Refined Saleable
Silver[2],[3](in MT) 81 91 -11% 85 328 350 -6%
- Saleable Silver -
Integrated 74 68 9% 70 266 301 -11%
Wind Power (in million
units) 73 76 -4% 55 444 448 -1%
Zinc CoP without Royalty
(Rs. / MT)[4] 50,831 54,948 -7% 50,271 53,228 50,654 5%
Zinc CoP without Royalty ( $
/ MT) 820 890 -8% 812 870 837 4%
Zinc LME ($ / MT) 2,080 2,029 2% 2,235 2,177 1,909 14%
Lead LME ($ / MT) 1,806 2,106 -14% 2,000 2,021 2,092 -3%
Silver LBMA ($ / oz.) 16.7 20.5 -18% 16.5 18.1 21.4 -15%
USD-INR 62.2 61.8 1% 62.0 61.1 60.5 1%
(1) Excluding captive consumption of 1,910 MT in Q4 FY 2015 and 7,755 MT in FY 2015 as compared with 1,991 MT and 7,262 MT in respective corresponding prior period.
(2) Excluding captive consumption of 9.9 MT in Q4 FY 2015 and 40.2 MT in FY 2015 as compared with 10.4 MT and 38.3 MT in respective corresponding prior period.
(3) Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes .
(4) Historical CoP has changed due to re-allocation of administrative expenses between zinc and lead.
Note: Numbers may not add up due to rounding off.
Operational Performance
Mined metal production during the year was 887kt, marginally higher from a year ago and a new annual record. In Q4 FY 2015, mined metal output was the highest ever at 269kt as compared with 200kt in corresponding prior period and 242kt in previous quarter. The increase was as per the guidance and mine plan of Rampura Agucha mine & Sindesar Khurd mine, driven by higher ore production during the quarter.
Integrated refined zinc, lead and silver metal production was lower by 3%, 5% and 11% respectively during the year due to lower mined metal production in the first half and temporarily lower silver grades at Sindesar Khurd mine. However, higher mined metal production volumes were achieved in the second half resulting in accretion to mined metal inventory, a large part of which will be consumed in FY 2016.
Integrated zinc and lead metal production during the quarter were record high due to higher feed availability and enhanced smelter utilization. Integrated refined zinc production was 217kt, up by 21% y-o-y and 13% sequentially. Production of integrated refined lead was up by 14% y-o-y at 33kt and up 33% sequentially. Integrated saleable silver production during the quarter was up 9% y-o-y and 6% sequentially at 74 MT on account of higher recovery.
The zinc metal cost of production per MT before royalty during the quarter was Rs. 50,831 ($820), lower by 8% from a year ago in dollar terms due to higher production volumes, lower diesel cost and higher acid credits, partly offset by higher landed coal cost and increased employee expense on account of long-term wage agreements signed in mid-year. For FY 2015, net zinc metal cost per MT before royalty was Rs. 53,228 ($870) as compared to Rs. 50,654 ($837) in previous year. The increase was primarily on account of long term wage agreement and higher landed coal cost, partly offset by higher acid realization and lower diesel cost.
Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDRA Act)
The new MMDRA Act, notified towards the end of the financial year, brings greater transparency in granting of mineral concessions. It also removes uncertainties relating to mine lease renewals, providing continuity of all our mining leases. However for existing mining leases, it notifies an amount not exceeding royalty, to be contributed to District Mineral Foundation (DMF) for the benefit of people affected by mining and an additional amount equivalent to 2% of royalty to National Mineral Exploration Trust (NMET). While the exact percentage for DMF contribution has not been notified, it can potentially impact mining of low grade and deep ore bodies which will not be conducive to growth of mining in the country.
Financial Performance
Revenues in Q4 FY 2015 were up 13% from a year ago to Rs. 4,073 Crore. The increase was driven by higher zinc sales & LME, partly offset by lower lead & silver prices and silver volumes. For the full year, revenues increased by 8% to Rs. 14,589 Crore primarily on account of higher zinc LME and sulphuric acid realization, partly offset by lower silver prices and lower zinc & silver sales.
The increase in revenue along with reduction in cost of production resulted in 14% y-o-y increase in EBITDA to Rs. 1,978 Crore in Q4. For the year, EBITDA was up 7% to Rs. 7,420 Crore primarily on account of higher revenue and was adversely impacted by higher royalty rates. Zinc royalty increased
from 8.4% to 10% and lead royalty increased from 12.7% to 14.5%, w.e.f September 1, 2014. Royalty rates for zinc and lead in India are the highest in the world and much higher compared to other base metals. In addition, an amount equal to 35% of royalty was provided w.e.f January 12, 2015 for DMF (33%) and NMET (2%), even as notification for DMF contribution under the MMDRA Act is awaited.
With effect from April 1, 2014, the Company has revised the estimated useful lives of certain assets based on a technical study and evaluation of the useful life of the assets conducted in this regard and Management's assessment thereof. Consequently, the depreciation charge for the quarter and year ended March 2015 is lower by Rs. 180.5 Crore.
Net profit increased by 6% to Rs. 1,997 Crore in Q4 FY 2015 as compared Rs. 1,881 Crore in corresponding prior quarter. In FY 2015, net profit increased by 18% to Rs. 8,178 Crore accentuated by higher treasury income due to mark-to-market gains on account of fall in interest rates.
Dividend
The Board of Directors has recommended a final dividend of 125% i.e. Rs. 2.50 per share on equity share of Rs 2.00 each. The total dividend for FY 2015 is 220% i.e. Rs. 4.40, the highest ever, against FY 2014 dividend of 175%. The pay-out ratio is 27% as compared to 25% in FY 2014, inclusive of dividend distribution tax.
Expansion Projects
The shaft sinking project at Sindesar Khurd is ahead of schedule with the main shaft sinking almost complete; having reached the depth of over 1 km of the planned depth of 1.05 km. Development of associated infrastructure is also progressing well and production from the shaft is planned to commence ahead of schedule, in later half of 2018.
The progress of underground shaft project at Rampura Agucha is behind schedule and has reached a depth of 650 metres of the planned depth of 950 metres. With the planned extension of the open cast mine, our overall production plan will be on track.
Reserve and Resource
During the year, gross addition of 19.4 million MT were made to reserve and resource (R&R), prior to a depletion of 9.4 million MT, adding further to our R&R. Total R&R at March 31, 2015 were 375.1 million MT containing 35.3 million MT of zinc-lead metal and 970 Moz of silver. Overall mine life continues to be 25+ years.
Outlook
We expect significant progress in terms of mine development and ore production from the underground mine projects. Rampura Agucha will continue to provide majority of mined metal in FY 2016, although overall production from this mine will be less than in FY 2015. The gap in production will be made up primarily by higher volumes from Sindesar Khurd
In FY 2016, mined metal production is expected to be higher from FY 2015, while integrated refined metal production, including silver, will be significantly higher as we will process the available mined metal inventory also.
The cost of production excluding royalty is expected to remain stable. There would be an additional outflow towards DMF and National Exploration Trust in accordance with the MMDRA Act 2015.
Liquidity and investment
The Company's cash and cash equivalents increased by 6% from the end of Q3 FY 2015 and 21% from a year ago. As on March 31, 2015, cash and cash equivalents were Rs. 30,785 Crore, out of which Rs. 23,333 Crore was invested in mutual funds, Rs. 3,921 Crore in bonds and Rs. 3,502 Crore in fixed deposits. The Company follows a conservative investment policy and invests in high quality debt instruments.
Earnings Call on Tuesday, April 21, 2015 at 11:00 am (IST)
The Company will hold an earnings conference call on Tuesday, April 21, 2015 at 11:00 am IST, where senior management will discuss the Company's results and performance. The dial in numbers for the call is given below:
Primary: +91-22-6746-5962 Secondary: +91-22-3960-0762
For further information, please contact:
Preeti Dubey, CFA Ekta Singh
General Manager Associate Manager
Investor Relations Investor Relations
Hindustan Zinc Limited Hindustan Zinc Limited
[email protected] [email protected]
Tel: +91-294-6604017 Tel: +91-800-3099676
Disclaimer
This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are by their nature subject to significant risks and uncertainties; and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India's joint venture partner.
About Sesa Sterlite Limited
Sesa Sterlite Limited ("Sesa Sterlite") is one of the world's largest diversified natural resources companies. Our business primarily involves exploring, extracting and processing minerals and oil & gas. We produce oil & gas, zinc, lead, silver, copper, iron ore, aluminium and commercial power and have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and Sri Lanka. Sesa Sterlite has a strong position in emerging markets with over 80% of its revenues from India, China, East Asia, Africa and the Middle East.
Sustainability is at the core of Sesa Sterlite's strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.
Sesa Sterlite is a subsidiary of Vedanta Resources plc, a London-listed company. Sesa Sterlite is listed on the Bombay Stock Exchange and the National Stock Exchange in India and has ADRs listed on the New York Stock Exchange.
Disclaimer
This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behavior of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
Sesa Sterlite Limited
(Formerly known as Sesa Goa Limited)
Vedanta, 75, Nehru Road,
Vile Parle (East), Mumbai - 400 099
http://www.sesasterlite.com
Registered Office:
Sesa Ghor, 20 EDC Complex,
Patto, Panaji (Goa) - 403 001
CIN: L13209GA1965PLC000044
For Further information, please contact
Communications
Roma Balwani
President - Group Communications & CSR
Tel: +91-22-6646-1330
[email protected]
Investor Relations
Ashwin Bajaj
Director - Investor Relations
Sheetal Khanduja
Associate General Manager - Investor Relations
Sunila Martis
Manager - Investor Relations
Tel: +91-22-6646-1531
[email protected]
SOURCE Sesa Sterlite Limited
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