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Vedanta Resources (VED)

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Friday 28 January, 2005

Vedanta Resources

3rd Quarter Results

Vedanta Resources PLC
28 January 2005


28th January 2005

                             Vedanta Resources plc
        Results for the 3rd quarter and 9 months ended 31 December 2004


Highlights:


   •Group EBITDA of US$120m* - including a contribution of US$26m* EBITDA
    from Konkola Copper Mines plc ('KCM')
   •Third quarter EBITDA +28%, 9 months EBITDA +21% over previous year
   •Successful US$600m bond issue - expansion projects fully funded
   •Solid progress on US$2.2bn growth projects -capital expenditure of
    US$876m since listing


Summary

The total EBITDA for the period is a record US$120m*. This includes a maiden
contribution from KCM, acquired on 5 November 2004, which is expected to
contribute US$26m* underlying EBITDA.

Over 9 months, EBITDA on existing operations has risen by 10% to US$254m. Higher
metals prices have been a major positive factor, assisted by some volume gains.
This has been offset by the tariff cuts in 2004, which affected each of our
metals and have reduced earnings by around US$45m over 9 months. Energy prices,
mentioned in our interim results, continue to be a feature but appear to have
stabilised at current levels. The third quarter is broadly in line with the
corresponding quarter of last year at US$94m, but significantly higher than in
the second quarter of 2005.

This quarter we passed a significant milestone with the successful issuance of a
US$600m bond. At the end of the period, including KCM, we had net debt for the
first time of US$10m. This followed total capital expenditure of US$582m for the
year to date, an increase from $370m at the half year.

Good progress has been made on all the growth projects. The expanded project at
Hindustan Zinc is moving towards the final stage and remains on track for
commissioning in June 2005. In the aluminium expansion at BALCO, mechanical
completion is at an advanced stage. The Copper expansion project at Tuticorin is
complete and we continue to wait for final environmental clearance.


Anil Agarwal. Chief Executive of Vedanta commented:

'We are delighted to be including KCM in our results for the first time and
welcome them to the Vedanta group. We are excited by the many opportunities to
develop the business and improve returns. The Group has shown solid profit
progression this year, building in line with our expectations and we remain
confident of delivering good progress on last year.'


* All figures for KCM relate to the eight week period post acquisition, on 5/11/
04. These numbers are subject to post acquisition audit and may be adjusted.


Aluminium

The plants at MALCO and BALCO are operating at full capacity with limited room
to raise production numbers at this stage. Production in the third quarter of
the current financial year is in line with the first two quarters of the year
and EBITDA continues to run above the levels of the last financial year. Better
prices and improved product mix have been partly offset by rising input costs,
including energy and water costs, as mentioned at the interim results.

The expansion at BALCO will take our total annual capacity from 135,000 tpa to
nearly 400,000 tpa. We remain on schedule to test some of the new pots, using
imported anodes and power, and for commissioning in March 2006.

The alumina project in Orissa is proceeding according to plan, with orders for a
majority of the packages placed with suppliers and the civil engineering work
progressing satisfactorily.


Copper - Existing Operations

Copper cathode production in the third quarter was 7% higher than the
corresponding period for last year and copper rod production has fully recovered
from the lower levels of the first half. Production of copper concentrate in the
Australian mines was affected by short term operational issues, which have now
been resolved.

EBITDA at the Sterlite copper business has increased sharply from the first two
quarters of the financial year. This has been driven by improved volumes and
lower unit costs. The third quarter saw limited improvement in TC/RC terms, but
further benefits from this should be felt in the current quarter.

The expanded facilities at Tuticorin are still awaiting final environmental
clearance and are ready to start production as soon as this is received. As
previously mentioned, we assume limited production from the expanded facility in
the current financial year.

In line with the changes to import tariffs last year, the Government of India
this month reduced the assistance on copper exports by around 50%. We estimate
that this will reduce earnings by approximately US$5m in the remaining two
months of this financial year.


Copper - Zambia

A 51% holding in KCM was acquired on 5 November 2004. The numbers for KCM
provided in this release are subject to audit and may lead to adjustments
arising from the acquisition. We anticipate that for the 8 week period from 5
November to 31 December, underlying EBITDA should be US$26m.

We believe KCM offers significant opportunities to improve returns and develop
the assets. Production costs remain high, at around 85 US cents per pound, and
our aim remains to stabilise and improve returns on the existing assets and then
to assess the many options that KCM offers for future growth.


Zinc

The production of zinc at our smelters was broadly in line with the third
quarter of last year. Sales were augmented by tolled smelting of our zinc
concentrate and there were exports of some surplus zinc and lead concentrate.

Higher zinc and lead prices, along with the sale of additional concentrates,
have led to the strong rise in EBITDA, which has more than offset the reductions
in tariffs. Energy costs remain higher than last year, but are in line with the
first half of the financial year.

The expansion project at the Chanderiya smelter is progressing well and is on
track for commissioning in June 2005, in line with previous guidance. At the
Rampura Agucha mines, most of the new mining equipment has been commissioned and
we plan to commission the new roaster in the current quarter.


Financials :

Financial Summary 
(US$m)                         Q3 (1)                       9 months
                   2004-05    2003-04   % change   2004-05    2003-04   %change

Turnover:
Aluminium             72.5          -          -     195.3          -         -
Copper               225.7          -          -     542.5          -         -
Zinc                 126.4          -          -     322.4          -         -
Other                 24.0          -          -      65.8          -         -
Total (existing)     448.6      337.7       32.8%   1126.0      920.8      22.3%
Copper - Zambia*     100.0          -          -     100.0          -         -
Total                548.6      337.7       62.5%   1226.0      920.8      33.1%
(including Zambia)*

EBITDA:
Aluminium             16.5          -          -      50.3          -         -
Copper                29.2          -          -      69.7          -         -
Zinc                  51.5          -          -     135.3          -         -
Other                 (3.2)         -          -      (1.3)         -         -
Total (existing)      94.0       93.8        0.2%    254.0      230.4      10.2%
Copper - Zambia*      26.0          -          -      26.0          -         -
Total                120.0       93.8       27.9%    280.0      230.4      21.5%
(including Zambia)*

(1) Segmental information under UK GAAP is not available for the corresponding
quarter of last year.
US$:INR average rates, 45.37 for 9 months ended 12/04, 46.29 for 9 months ended
12/03 and an average of 45.92 over 2003-04.

Operations :

Production summary   
(mt, 000's)                     Q3                          9 months
                   2004-05   2003-04   % change   2004-05   2003-04   % change
                    
Alumina                 79        66      19.7%       209       200        4.5%
Aluminium               34        32       6.3%       100        97        3.1%
Copper - existing ops.
Mined metal content      8        13     (38.5%)       28        37      (24.3%)
Copper - Cathode        47        44       6.8%       125       137       (8.8%)
Copper - Rods           34        32       6.3%        86        91       (5.5%)

Copper -Zambia *
Mined metal content     16         -         -         16         -          -
Copper - Cathode        29         -         -         29         -          -
Total Cathode           76         -         -        154         -          -
- Inc.Zambia
Zinc Metal content      89        80      11.3%       256       232       10.3%
in concentrate
Refined Zinc            55        56      (1.8%)      158       165       (4.2%)

*All figures for KCM relate to the eight week period post acquisition, on 5/11/
04. These numbers are subject to post acquisition audit and may be adjusted.



For further information please contact:

Peter Sydney-Smith, Finance Director                      Tel: +44 20 7659 4734
John Smelt, Head of Investor Relations                         +44 787 964 2675
Vedanta Resources plc

James Murgatroyd
Robin Walker                                              Tel: +44 20 7251 3801
Finsbury


Notes to Editors


Vedanta is a London listed diversified metals and mining group.  Our principal
operations are located throughout India, with further operations in Zambia and
Australia.  The major metals produced are aluminium, copper, zinc and lead.



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