MUMBAI(Commodity Online): Sterlite Industries Ltd has reported 21% lower net sales and 42% declines in profit before taxes for Q1,2009-10 compared to Q1,2008-09. Earnings per share has fallen to Rs 9.49 from Rs 16.25 in Q1,2008-09.
During Q1, aluminium production was 72,056 MT compared with 88,989 MT in the corresponding prior quarter. The decrease in production was primarily on account of the complete ramp down of the BALCO plant I smelter, Sterlite C
Revenues and EBITDA for Q1 2009 were Rs. 615 crores and Rs. 147 crores respectively, compared with Rs. 1,167 crores and Rs. 452 crores in the corresponding prior quarter. The positive impact of lower operating costs was more than offset by the lower LME aluminium prices and the complete ramp down of BALCO plant I smelter. During Q1, the average LME aluminium price was $1,488 per tonne, a decrease of 49% compared with the corresponding prior quarter. The decrease in
revenues, due to lower LME prices, was partly offset by the sale of surplus power. The revenues from this business are now classified under a new segment “Power”.
Projects BALCO
Construction of the new 325 kt aluminium smelter and 1,200MW CPP at BALCO are progressing well. All major packages have been ordered with shipments of equipment starting to arrive on site. The project is on schedule for first metal tapping from October 2010.
VAL 500 ktpa Aluminium Smelter
The company is in the process of starting the phased commissioning of the second phase of 250 kt aluminium smelter for completion by end FY 2010.
1.25 mtpa Aluminium Smelter
Construction of the new 1.25 mtpa Jharsuguda II aluminium smelter project is progressing well with more than 50% of civil works completed. All major packages have been ordered and construction and lining of pots has now started. Overall, the project is on schedule for phased commissioning from March 2010.
Lanjigarh Alumina Refinery Construction activity is in full swing on the new 3mtpa Lanjigarh alumina refinery expansion project and is on schedule for completion by mid 2011, as planned. Work on the 600,000 tpa debottlenecking project at our Lanjigarh alumina refinery is also progressing on schedule for completion by March 2010.
Copper Business (“Sterlite Industries”)
During Q1, the copper cathode production at our refineries was 78,189 tonnes, an increase of 15% compared with the corresponding prior quarter. However, cathode production in Q1, was lower than its rated capacity, primarily on account of low copper in concentrate and certain operational issues, which have since been rectified.
During the quarter, mined metal production at the Australian mines was stable at 7,000 tonnes. Revenues and EBITDA for Q1 were at Rs. 2,297 crores and Rs.117 crores respectively, compared with Rs. 2,959 crores and Rs. 402 crores in the corresponding prior quarter. The decrease in revenues and EBITDA was primarily on account of the sharp fall in by-product credits.
Zinc Business (“HZL”) During Q1 HZL produced 162,241 tonnes of zinc mined metal and 20,601 tonnes of lead mined metal, an increase of 17% and 5% respectively, compared with the corresponding prior quarter. During Q1 the company produced 139,315 tonnes of refined zinc, an increase of 9% compared with the corresponding prior quarter. The refined zinc production in Q1 was lower than the production in Q4 FY2009, primarily on account of operational factors during the current quarter at our hydro
smelters at Chanderiya, which are being addressed. Sales during Q1 were augmented by the sale of 73,962 dry metric tonnes of surplus zinc concentrate.
During the quarter, saleable silver production was 29,527 kilograms, an increase of 25% compared with the corresponding prior quarter. The increase in production was primarily on account of higher silver content in the mined ore. Revenues and EBITDA for Q1 were Rs 1,489 crores and Rs 759 crores respectively as compared with corresponding prior quarter of Rs. 1,619 crores and Rs. 984 crores. During the quarter, the positive impact of higher volumes and rupee depreciation on sales and EBITDA was more than offset by the sharp decline in the zinc and lead LME prices and lower by-product realisation.
Zinc Expansion Debari Smelter Project
Construction activities at the 210,000 tpa zinc smelter and 100,000 lead smelter at Rajpura Dariba are progressing well with construction in full swing. We have started equipment erection at the Zinc smelter. The project is on schedule for completion by mid 2010. Work at the mining projects at Rampura Agucha, Sindesar Khurd and Kayar are also on schedule, ordering of the long delivery equipment for the concentrator is complete and site work has commenced. The project is on
schedule for progressive commissioning from mid-2010.
Power Business The company has reported selling surplus power in commercial power markets to optimise our returns following the closure of our aluminium smelter at BALCO Plant I. In order to present a more accurate picture of the segment performance, a new reporting segment has been created to disclose the revenue and profitability of the power business. Currently, the power businesses comprise the 123 MW wind power generators at HZL and the 270 MW power plant at BALCO. So far the compnay sold 287 million units of power in Q1 compared with 74 million units in the corresponding prior quarter.
Revenue and EBITDA in Q1 from the power business were Rs. 136 crores and Rs. 102 crores compared with Rs. 25 crores and Rs. 23 crores in the corresponding prior quarter
