Sterlite Industries (India) Limited Unaudited Results for the First Quarter Ended 30 June 2008

  
    
  
  
    
      Sterlite Industries (India) Limited (“Sterlite” 
      or the “Company”) 
      today announced its results for the first quarter ended 30 June 2008 (“Q1”).
    
    
      Highlights
    
    
      
        Refined zinc and lead production at 128,000 tonnes and 17,000 tonnes, 
        an increase of 38% and 27% respectively
      
      
        88,000 tpa zinc debottlenecking project successfully completed
      
      
        Significant improvement in unit costs in Zinc and Copper-India 
        businesses, despite rising energy costs
      
      
        Dispatches start from the new aluminium smelter at Jharsuguda, ahead 
        of schedule
      
      
        Commercial Energy: Awarded the 1,980 MW Talwandi Sabo power project in 
        a competitive bidding process
      
      
        Net Sales and Attributable Profits at Rs 5,770 crore and Rs 1,151 
        crore respectively
      
      
        Strong balance sheet with net cash position of Rs 12,244 crore
      
    
    
      
        
          
            Unaudited Consolidated Financial Highlights
          
        
      
      
        
          
            (in Rs Crore, except as stated)
          
        
      
      
        
           
        
        
           
        
        
          Quarter Ended 30 June
        
        
           
        
        
          Change
        
        
           
        
        
          Year Ended 31 March
        
      
      
        
        
        
           
        
        
          2008
        
        
        
        
           
        
        
          2007
        
        
        
        
           
        
        
          %
        
        
        
        
           
        
        
          2008
        
        
        
      
      
        
          Net Sales/Income from operations
        
        
        
        
          5,770.1
        
        
        
        
        
        
          6,139.1
        
        
        
        
        
        
          (6
        
        
          )
        
        
        
        
          24,705.4
        
        
        
      
      
        
          EBITDA
        
        
        
        
          2,229
        
        
        
        
        
        
          2,506.2
        
        
        
        
        
        
          (11
        
        
          )
        
        
        
        
          9,434.3
        
        
        
      
      
        
          EBITDA Margin
        
        
        
        
          38.6
        
        
          %
        
        
        
        
          40.8
        
        
          %
        
        
        
        
          -
        
        
        
        
        
        
          38.2
        
        
          %
        
      
      
        
          Depreciation
        
        
        
        
          165.5
        
        
        
        
        
        
          203.1
        
        
        
        
        
        
          18.5
        
        
        
        
        
        
          595.0
        
        
        
      
      
        
          Interest
        
        
        
        
          87.4
        
        
        
        
        
        
          95.5
        
        
        
        
        
        
          8.4
        
        
        
        
        
        
          318.6
        
        
        
      
      
        
          Profit before tax
        
        
        
        
          1,976.1
        
        
        
        
        
        
          2,207.6
        
        
        
        
        
        
          (10.5
        
        
          )
        
        
        
        
          8,467.9
        
        
        
      
      
        
          Taxes
        
        
        
        
          380.8
        
        
        
        
        
        
          524.7
        
        
        
        
        
        
          27.4
        
        
        
        
        
        
          2,102.7
        
        
        
      
      
        
          Profit after tax
        
        
        
        
          1,595.4
        
        
        
        
        
        
          1,682.9
        
        
        
        
        
        
          (5.2
        
        
          )
        
        
        
        
          6,365.2
        
        
        
      
      
        
          Minority Interest
        
        
        
        
          447
        
        
        
        
        
        
          540
        
        
        
        
        
        
          17.2
        
        
        
        
        
        
          1,961.6
        
        
        
      
      
        
          Attributable profits
        
        
           
        
        
          1,151.1
        
        
           
        
        
           
        
        
          1,142.9
        
        
           
        
        
           
        
        
          0.7
        
        
           
        
        
           
        
        
          4,399.4
        
        
           
        
      
      
        
          Earnings Per Share (“EPS”) 
          (Rupees per share)
        
        
           
        
        
          16.3
        
        
           
        
        
           
        
        
          19.9
        
        
           
        
        
           
        
        
          -
        
        
           
        
        
           
        
        
          65.2
        
        
           
        
      
    
    
      Copper Business
    
    
      During Q1, the copper cathode production at the Tuticorin custom smelter 
      was 68,000 tonnes compared with 81,000 tonnes in the corresponding prior 
      quarter. The production was lower on account of the planned bi-annual 
      plant maintenance shut down for 26 days in May – 
      June 2008. The smelter is now working well and is back to the normal 
      production levels. We now expect the campaign life of the smelter now to 
      be about three years.
    
    
      Mined metal production at our Australian mines was stable at 7,000 
      tonnes in Q1.
    
    
      Operating costs in our Tuticorin smelter showed significant improvement 
      despite high energy costs, primarily due to better copper recovery and 
      higher by-product realisations.
    
    
      EBITDA for Q1 was higher at Rs. 584 crore compared with Rs. 382 crore in 
      the corresponding prior quarter, primarily on account of higher interest 
      income; better operating efficiencies and by-product management which 
      were offset by lower TcRcs and increase in fuel prices.
    
    
      TcRcs remained under pressure in Q1 compared with the corresponding 
      prior quarter.
    
    
      During Q1, SIIL received the prestigious Golden Peacock Environment 
      Award 2008 from the World Environment Foundation for its effective 
      implementation of environment management systems on a sustainable basis. 
      The Company also received the prestigious Confederation of Indian 
      Industry award for Excellence in Human Resources.
    
    
      Aluminium Business
    
    
      Aluminium production in Q1 was 89,000 tonnes compared with 88,000 tonnes 
      produced in the corresponding prior quarter.
    
    
      EBITDA for Q1 was Rs. 458 crore compared with Rs. 418 crore in the 
      corresponding prior quarter. The increase in EBITDA was primarily on 
      account of higher volumes and better LME prices, partly offset by higher 
      energy related costs.
    
    
      The Lanjigarh alumina refinery produced 136,000 tonnes of calcined 
      alumina from a single stream operation using bauxite purchased from 
      third parties and BALCO’s bauxite. The 
      refinery is performing well and is close to stabilisation.
    
    
      The recently commissioned Jharsuguda smelter produced 800 tonnes of 
      aluminium during the quarter. The first dispatch of aluminium has 
      successfully commenced from Jharsuguda. The first power unit has been 
      synchronized. We will continue to progressively commission the Phase 1 
      pot line together with the remaining power units.
    
    
      Zinc Business
    
    
      Mined zinc metal and lead metal production in Q1 was marginally up at 
      138,000 tonnes and 20,000 tonnes respectively, compared with the 
      corresponding prior quarter. During Q1, HZL produced 128,000 tonnes of 
      zinc and 17,000 tonnes of lead, an increase of 38% and 27% respectively 
      compared with the corresponding prior quarter.
    
    
      Consequent to the increase in smelting capacities and output, 
      availability of surplus concentrate for sale was limited.
    
    
      EBITDA for Q1 was Rs. 1,187 crore compared with Rs. 1,706 crore in the 
      corresponding prior quarter. The positive impact of higher volumes on 
      sales and EBITDA in Q1 was offset by the adverse impact on account of a 
      decline in zinc LME prices to $2,115 per tonne in Q1 from US $3,667 per 
      tonne in the corresponding prior quarter.
    
    
      During Q1, HZL was able to achieve significant reduction in the 
      operating cost on the back of increased volumes, improved operational 
      efficiencies and higher byproduct credits, partially impacted by the 
      removal of 5% import duty on zinc during Q1.
    
    
      During the quarter, HZL received the coveted annual process excellence 
      award for the Best Manufacturing Process Improvement by International 
      Quality and Productivity Centre – London. The 
      Rampura Agucha mine received the Overall Excellence Award from the 
      Federation of Indian Mineral Industries.
    
    
      Consolidated Net Profit after Taxes and EPS
    
    
      Consolidated Net Profit after Taxes, attributable to equity shareholders 
      for Q1 was Rs 1,151 crore compared with Rs 1,143 crore in the 
      corresponding prior quarter. EPS in Q1 was Rs 16 per equity share 
      compared with Rs 20 per equity share in the corresponding prior quarter, 
      due to the fresh issue of shares on account of Sterlite’s 
      ADS offering during the corresponding prior quarter.
    
    
      Expansion Projects
    
    
      Vedanta Aluminium Limited
    
    
      In the recent hearings in the Honourable Supreme Court of India 
      regarding the bauxite mining clearance at Lanjigarh, all the arguments 
      have been heard and we expect the Court to give its final judgment 
      shortly.
    
    
      Work on the second phase of the green-field 500,000 tpa aluminium 
      smelter and associated captive power plant in Jharsuguda, Orissa, is 
      progressing well. Overall the project is on schedule.
    
    
      Commercial Energy
    
    
      Work on the 2400 (4X600) MW coal based independent thermal power plant 
      is progressing on schedule for commissioning from late 2009 as earlier 
      announced. Basic engineering is complete and nearly 90% of the detailed 
      engineering is complete. Civil foundations of the boiler units 1, 2 and 
      3 are complete and structural erection for the same is progressing well.
    
    
      During Q1, Sterlite Energy Limited has emerged successful in an 
      international bidding process and has been awarded the 1,980 MW thermal 
      power plant at Talwandi Sabo, in the State of Punjab in India. The 
      project is expected to be completed in 56 months.
    
    
      Zinc and Lead
    
    
      Recently, HZL announced Phase III of it expansion program, comprising a 
      210 ktpa Zinc Smelter, 100 ktpa Lead Smelter and 160 MW of Captive Power 
      Plants. The order for the Lead Plant and Captive Power Plant has been 
      placed on a lumpsum turnkey basis and major orders for the Zinc Plant 
      have been placed. Initial work has started for the smelters and 
      associated mining and captive power plants.
    
    
      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.