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Sterlite Industries (India) Limited (“SIIL”
or the “Company”)
(NYSE:SLT) today announced its results for the second quarter (“Q2”)
and Half year (“H1”)
ended 30 September 2008.
Highlights
Attributable PAT up 18% at Rs. 1,277 crore
Highest mined zinc production in any quarter
Refined zinc production at 122,000 tonnes, an increase of 30% over the
corresponding prior quarter
Significant reduction in unit production costs in Zinc and Copper
businesses, despite rising energy costs
Lanjigarh bauxite mining project cleared by the Honorable Supreme
Court of India
Commissioning of first phase of the Jharsuguda aluminium smelter
progressing well; second power unit commissioned
All other expansion projects progressing well and on schedule
Strong balance sheet with net cash position of approximately Rs.
12,000 crore as at 30 September 2008
Unaudited Consolidated Financial Highlights
(Rs. in Crore, except as stated)
Quarter ended
30 September
Change
Six months ended
30 September
Change
2008
2007
%
2008
2007
%
Net Sales/Income from operations
6,594
6,567
0.4
12,364
12,706
-2.7
Profit before tax
2,012
2,020
-0.4
3,988
4,228
-5.7
Taxes
292
446
-34.5
672
971
-30.8
Profit after tax
1,721
1,574
9.4
3,316
3,257
1.8
Minority Interests including share of associates
441
491
-10.2
891
1,031
-13.6
Attributable profit
1,277
1,083
17.9
2,428
2,226
9.1
Earnings Per Share (“EPS”)
(Rs/share)
18.0
15.3
17.6
34.3
34.7
-1.1
Copper Business
Total cathode production was 149,000 tonnes in H1 compared with
production of 172,000 tonnes in the corresponding prior period,
primarily on account of a planned 26 day maintenance shutdown in the
first quarter. The Tuticorin smelter produced 81,000 tonnes of cathode
in Q2 compared 91,000 tonnes in the corresponding prior quarter,
primarily due to the stabilisation issues faced during the post-shutdown
ramp up, which have now been resolved.
Mined metal production at our Australian mines was 12,000 tonnes in H1,
a decrease of 20% compared with the corresponding prior period.
Production during Q2 was 6,000 tonnes, a decrease of 25% compared with
the corresponding prior quarter. The decrease in production was
primarily on account of an unscheduled 20-day shutdown of the processing
plant in Q2 to make structural repairs and reinforcements. The
processing plant is now fully operational.
H1 revenues were Rs. 6,691 crore compared with Rs. 6,651 crores in the
corresponding prior period. Revenues for Q2 were Rs. 3,733 crore
compared with Rs. 3,537 crore in the corresponding prior quarter.
H1 EBITDA was Rs. 994 crore compared with Rs. 582 crore in the
corresponding prior period. EBITDA for Q2 was Rs. 590 crore compared
with Rs. 246 crores in the corresponding prior quarter. The increase in
EBITDA was mainly on account of improved by-product realisations and
better copper recoveries, despite lower TcRcs.
SIIL received the prestigious IEI Safety Innovation Award 2008 from
Institute of Engineers India. The company also bagged the Madras Export
Processing Zone SEZ Award for outstanding export performance in
the year 2006–07.
Aluminium Business
Aluminium production in H1 was marginally up at 180,000 tonnes compared
with production of 178,000 tonnes in the corresponding prior period.
Production in Q2 was also marginally up at 91,000 tonnes compared with
the production of 90,000 tonnes in the corresponding prior quarter. The
aluminium smelter at Korba continues to operate at its rated capacity.
The first stream of the alumina refinery at Lanjigarh is fully
operational, using bauxite supplies from both BALCO and third parties.
Calcined alumina output at Lanjigarh was 250,000 tonnes in H1 and
114,000 tonnes during Q2 and is sufficient to meet our current internal
requirements at BALCO and Jharsuguda.
H1 revenues were Rs. 2,285 crore, an increase of 9% compared with the
corresponding prior period. Q2 revenues were Rs. 1,117 crore, an
increase of 7% compared with corresponding prior quarter. The increase
in revenue was primarily on account of higher LME prices and
depreciation of the India rupee.
H1 EBIDTA was marginally up at Rs. 731 crore compared with the
corresponding prior period. Q2 EBIDTA at Rs. 280 crore was lower by 11%
compared with the corresponding prior quarter. The decrease in EBIDTA in
Q2 was primarily on account of higher costs of energy and input
materials.
BALCO received the coveted National Safety Award from the
Ministry of Labour and Empowerment for the Korba II smelter. BALCO’s
Mainpat mines won the FIMI Gem Granite award for Environment
Management.
Zinc Business
Mined metal production at 305,000 tonnes during H1 was highest ever
reported in any six month reporting period. Mined metal production in Q2
was 167,000 tonnes, the highest reported in any quarter and up 17%
compared with the corresponding period last year. Higher H1 and Q2
production has been the result of the successful commissioning and
ramp-up of the stream III concentrator at Rampura Agucha.
Refined zinc production was a record 249,000 tonnes in H1, an increase
of 33% compared with the corresponding prior period. Refined zinc
production in Q2 was 122,000 tonnes. The Chanderiya pyro smelter was
shut down for planned maintenance for 50 days in Q2. The smelter is now
operating at normal production levels.
Refined lead production was 30,000 tonnes in H1, an increase of 11%
compared with the corresponding prior period. Refined lead production in
Q2 was 13,000 tonnes.
Sales during the quarter were augmented by the sale of 97,000 dry metric
tonnes of zinc and lead concentrate.
During Q2, HZL was able to achieve significant reductions in the
operating cost on the back of improved operational efficiencies and
higher by-product credits, despite higher energy costs.
The positive impact of the higher metal volumes and the depreciation of
the Indian rupee in Q2 was more than offset by the sharp decline in the
zinc LME prices. During the quarter, the average zinc LME price was
$1,773 per tonne as compared with $3,238 per tonne in the corresponding
prior quarter.
Attributable Net Profit after Taxes
Attributable Net Profit after Taxes for Q2 and H1 were Rs. 1,277
crore and Rs. 2,428 crores, an increase of 18% and 9% respectively
compared with the corresponding prior periods, due to increases in
volumes, operational efficiencies and improved byproduct realisations,
despite a sharp decline in commodity prices.
The effective tax rate for H1 was also lower compared with the
corresponding prior period mainly on account of various tax planning
initiatives.
Expansion Projects
Aluminium
On 8 August 2008, the Supreme Court cleared the bauxite mining project
at Lanjigarh, Orissa. We expect to start feeding the refinery with our
own Niyamgiri bauxite production by mid CY 2009.
Work on the first phase of the 500,000 TPA aluminium smelter and
associated captive power plant at Jharsuguda, Orissa is progressing well
and as at 30 September 2008, 76 pots had been brought in line supported
by the first unit of the captive power plant. Additionally, the second
unit of the captive power plant has been recently commissioned. We will
progressively commission Phase I of the aluminium smelter and expect it
to achieve its capacity of 250,000 tonnes per annum by end of this
fiscal year.
Preliminary work and ordering for the recently announced 1.25mtpa
aluminium expansion project at Jharsuguda and 325kt aluminium expansion
project at Korba has commenced.
Zinc
The construction work for the 310,000 tonnes zinc and lead smelter at
Rajpura Dariba with 160 MW associated captive power plant along with
Rampura Agucha mine expansion is progressing well and is on schedule for
completion by mid-2010, as announced earlier. Work at the other mining
projects at Sindesar Khurd and Kayar are also progressing as per
schedule for progressive commissioning by early 2012.
Commercial Energy
Work on 2,400 MW (4x600 MW) coal based Independent thermal power plant
at Jharsuguda is progressing well and overall the project is on schedule
for progressive commissioning from late 2009 as expected.
We have taken possession of land from the Government of Punjab for the
1,980 MW coal based thermal power plant at Talwandi Sabo in the State of
Punjab, India and have commenced engineering and procurement activities.
About Sterlite Industries
Sterlite Industries is India's largest non-ferrous metals and mining
company with interests and operations in aluminum, copper and zinc and
lead. It is a subsidiary of Vedanta Resources plc, a London-based
diversified FTSE 100 metals and mining group. Sterlite Industries' main
operating subsidiaries are Hindustan Zinc Limited for its zinc and lead
operations; Copper Mines of Tasmania Pty Limited for its copper
operations in Australia; and Bharat Aluminum Company Limited for its
aluminum operations. The company operates its own copper operations in
India. The company has entered the commercial energy generation business
and is in the process of setting up a 2,400MW independent power plant
through its wholly owned subsidiary, Sterlite Energy Limited. Sterlite
Industries is listed on the Bombay Stock Exchange and National Stock
Exchange in India and the New York Stock Exchange in the United States.
For more information, please visit www.sterlite-industries.com.
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 behaviour 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.