Vedanta Resources plc FY 2015 Results · FY 2015 Results 14 May 2015. ... Any forward looking...
Transcript of Vedanta Resources plc FY 2015 Results · FY 2015 Results 14 May 2015. ... Any forward looking...
Vedanta Resources plc
FY 2015 Results14 May 2015
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The views expressed here may contain information derived from publicly available sources that have not been independently
verified.
No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information.
Any forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has
been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be
relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta"). Past performance of Vedanta cannot be
relied upon as a guide to future performance.
This presentation 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,' 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 environmental, climatic, natural, 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.
This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or any of its subsidiary
undertakings or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any
part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment
decision.
1VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Overview
Anil Agarwal
Executive Chairman
Strategic Review
Tom Albanese
Chief Executive Officer
Focus on Safety – Key to Operational Excellence
� Fatal accidents and injury rates have declined
� Implementing programs to eliminate fatalities and
control injuries:
− Leadership focused on a Zero-Harm culture
across the organization
− Consistent application of ‘Life-Saving’
performance standards
− Quantitative risk assessments for all the critical
areas
− Formal identification of process safety risks and
focusing on the management of controls
− Improved safety investigations and follow-up
− Building internal capacity to deliver and drive
our programs
− Review of safety incidents at Board, Business
and Operational levels
4VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
2220 19
8
FY2012 FY2013 FY2014 FY2015
Fatal incidents
0.83
0.55 0.540.46
FY2012 FY2013 FY2014 FY2015
LTIFR (per million man-hours worked)
Sanquelim Reclaimed Iron Ore Mine, Goa
Making a positive contribution in FY2015
Environment
� Significant investments ($ 50+ mn over last 3 years)
� Signed WBCSD Pledge for access to safe Water,
Sanitation and Hygiene (WASH)
Preserving and protecting our license to operate
� Integrated approach: Sustainable Development and CSR
� Benefitting around 4 million people through community
development programmes
� Multiple talent development platforms for employees
5VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Communities : Social Investment
$42 million
Contribution to India’s Oil Production
27%
Payment to Government Exchequers
$4.6 billion1
Direct and Indirect Employment
82,000
Notes:1. Tax transparency report to be issued
FY2015 Results Highlights
Operations
� Zinc-India: Record full year mined metal production;
underground transition better positioned
� Aluminium & Alumina: Record full year production; new
smelters started
� Copper India: Record full year production
� Copper Zambia: Lower production; KDMP Shaft # 1 back on
line in Q4
� Iron Ore: Commenced production at Karnataka; approvals at
Goa awaited, export duty reduced to 10%
� Oil & Gas: Production normalised post shutdown in Q2
Financial
� Strong underlying results from diversified portfolio in a
volatile commodity price environment
� EBITDA of $3.7 bn, adjusted EBITDA margin 38%2
� Underlying Attributable Profit of $(39)mn3, underlying EPS of
USc (14.2)3
� Free cash flow post capex of $1 bn
� Gross debt reduced by $200 mn during the year; Gross and
Net debt reduced by $600 mn in H2 FY2015
� Non-cash Impairment charge of $4.5 bn (net of tax),
primarily at Oil & Gas due to lower oil price outlook
� Final Dividend of 40 US cents per share, up 3%
6VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
1. Mysteel Iron Ore index price for 56% Fe FoB India2. Excludes custom smelting at Copper and Zinc-India operations3. Based on profit for the period after excluding special items and other gains and losses,
and their resultant tax and minority interest effects
Corporate
� Cairn Tax Matter: Multiple legal options being pursued
� Royalties reduction announced at Copper-Zambia
Commodity prices and EBITDA Margins
FY2015 Q4 FY2015
$/ tonne unless otherwise indicated
Commodityprices
Margin(%)
Commodityprices
Margin (%)
Oil & Gas ($/bbl) 85 62% 54 28%
Zinc India 2,177 51% 2,080 47%
Zinc Intl 31% 24%
Aluminium 1,890 20% 1,800 19%
Power 23% 2%
Iron Ore/Pig Iron1 52 10% 40 (5)%
Copper Zambia 6,558 (0.4)% 5,818 (8)%
Group Adjusted2 38% 23%
Production Growth and Asset optimisationOperating at full capacity
Strengthening the Balance SheetReduce Gearing; maximise free cash flows
Identify next generation of ResourcesContinue to add R&R
Simplification of the Group structure
Protect and preserve our License to Operate
Building Momentum on Delivering our Strategic Priorities
7VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Strategic Priority What we Achieved Focus Areas
� Achieved record annual production in alumina, aluminium, Copper - India , and Zinc - India
� Started idle Aluminium smelting capacity� Restarted Iron Ore operations in Karnataka
� Achieved synergies from Sesa Sterlite merger� Realised synergies of $50 mn in operating costs &
procurement in FY 2015
� Zinc India: Gross addition of 1.1 mn tonnes MIC to R&R
� Oil and gas: Gross 2P reserve addition of 16 mn boe� Gamsberg 250 kt project approved and commenced
� Gross debt reduced by $200 mn in FY2015 and $600 mn in H2 FY2015
� Optimising capex and opex across businesses
� Decline in fatal accidents and LTIFR� Achieved water and energy saving targets� Around 4 mn beneficiaries of our
community initiatives
Achieve full capacity across businesses� Al & Power: Ramp-up pots; secure domestic bauxite and coal;
commence production from Chotia coal block� Zn-India: Ramp-up of RAM U/G and SK mine � O&G: Ramp-up EOR at Mangala; increase gas production� KCM: Deliver operational turnaround� Iron Ore: Commence operations at Goa
� Pursue further simplification� Realise $1.3 bn of procurement and marketing savings
� Optimize oil exploration activities; while preserving growth options
� Leverage expertise of central mining exploration group� Identifying next generation of resources at Barmer Hill and
satellite fields� Phased development of Gamsberg
� Maintain positive FCF despite current market volatility� Reduce net gearing in the medium term� Efficiently refinance upcoming maturities
� Achieve zero harm� Implement biodiversity management plans at all sites� Obtain local consent prior to accessing resources
…Delivering Margins and Progressive Dividends
Resilient Portfolio in Volatile Commodity Environment
8VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Diversified Portfolio with Low Cost Assets… EBITDA Mix for FY2015
39%
37%
11%
4%
7% 1%
Oil & Gas
Zinc
Aluminium
Power
Copper
Iron Ore
Competitive Position on Global Cost Curve
I II III IV
Zinc Intl.
Oil & Gas62%
ZincIndia51%
Aluminium20%
31%
Size of circle denotes EBITDA contribution and
% denotes EBITDA margin in FY2015
Copper Zambia(0.4)%
EBITDA Margins Dividends
0
300
600
900
1,200
1,500
1,800
0
10
20
30
40
50
60
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12PF
FY13
FY14
FY15
Adjusted EBITDA Margin % ¹ (LHS) LMEX ²
Brent ² Copper Equiv. Production- kt (RHS)
Note: 1. Excludes custom smelting at Copper and Zinc-India operations.2. LMEX and Brent rebased3. In FY2004, a single dividend of 5.5 USc per share was paid, for the four months since listing, equivalent to an annual payment of 16.5 USc per Share
0
10
20
30
40
50
60
70
FY04³ FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Usc/
sh
are
Well-Invested Assets Driving Production Growth
9
0
500
1,000
1,500
2,000
2,500
3,000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12PF² FY13 FY14 FY15 Near Term
Co
pp
er Eq
uiv
ale
nt
Pro
du
cti
on
(kt)
Zinc-Lead Silver Copper Aluminium Power Iron Ore Oil & Gas
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Total Production (copper equivalent kt)
Notes:
1. All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using average commodity prices for FY2015. Power rebased using FY2015
realisations, copper custom smelting capacities rebased at TC/RC for FY2015, iron ore volumes refers to sales with prices rebased at average 56/58% FOB prices for FY2015
2. PF refers to proforma for Cairn India acquisition
+66%
Near Term
India: Strong Growth Forecast
Building growth momentum
� Pick up in investments and lower oil prices
� Continuing reforms: Insurance, Coal and MMDR bills
passed
� Lower inflation providing headroom for interest rate cuts
Government priorities and targets
� Make in India: Import substitution and employment
generation
� Housing for all by 2022: 60 million houses in urban and
rural areas
� Smart cities: USD1.2 trillion investment on building
urban infrastructure over next 20 years to improve
quality of life
� Power for all by 2019: focus on energy efficiency, smart
grids, coal and gas availability and renewable energy
� Digital India: transform India into a digitally empowered
society and knowledge economy
� Construction of 30 km highway per day, development of
high speed rail and waterways
10VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
6.6%
10.4% 10.1%
Zinc Aluminium Copper
India: Fastest Growing Major Economy in 20151
India’s Metal Consumption Growth Rate FY20152
Notes:
1. IMF World Economic Outlook Database, April 2015
2. Includes secondary and value added consumption from all sources
7.2 7.5 7.57.46.8 6.3
0.6
(3.8)
(1.1)
0.1
(1.0)
1.0
2014 2015 2016
India China Russia Brazil
Regulatory Developments
11VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
� Participating in a national review to increase gas production
� Development approvals received for Raageshwari Deep Gas ProjectOil and Gas
Aluminium & Power
Iron Ore
Zinc India
Zambia
� VAT refund procedure for exports eased, on a going-forward basis� Government announced intention to reduce royalties
� First stage of coal block auctions concluded
� MMDR Act 2015 approved by parliament, to pave way for resource auctions
� CTO received for BALCO 1,200 MW power plant
� Resumed mining at Karnataka
� Mining leases renewed at Goa; allocated interim capacity of 5.5 mtpa saleable ore
� Export duty reduced from 30% to 10% (<58% Fe)
� Mining leases renewed under the new MMDR Act, at least til 2030
─ Royalty issues under the new MMDR Act
Copper- Zambia
India
Zambia
Financial Review
D.D. Jalan
Chief Financial Officer
Financial Highlights
� Strong EBITDA margins from our diversified portfolio in a volatile commodity environment
� Gross and Net debt reduced by c.$600 mn in H2 and Gross debt reduced by c.$200 mn in full year
� Non-cash Impairment charge of $4.5 bn (net of tax), primarily at Oil & Gas
� Committed to progressive dividend policy, full year dividend up 3%
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION 13
$mn or as stated FY2014¹ FY2015 Change
EBITDA 4,491 3,741 (17)%
Adjusted EBITDA margin² (%) 45% 38%
Free Cash Flow before Growth Capex 2,695 2,578 (4)%
Growth Capex 1,425 1,531 7%
Free Cash Flow after Growth Capex 1,270 1,047 (18)%
Gross Debt 16,871 16,668 (1)%
Net Debt 7,920 8,460 7%
Gearing (%) 30.6% 40.8%
Gearing – pre-impairment (%) 30.6% 33.5%
Net Debt/EBITDA 1.8 2.3
Underlying Attributable PAT3 40 (39)
Underlying EPS (USc/share)3 14.7 (14.2)
Total Dividend (USc/share) 61 63 3%
Notes:
1. Previous period figures have been regrouped / rearranged wherever necessary to conform to current period presentation.
2. Excludes custom smelting at Copper and Zinc-India operations.
3. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects.
4,491
147
87
4,275
3,741
(121)
(190)
(301)(43)
EBITDAFY2014
LME/Oil/Commodity
prices
Premuims/TcRc/ Brent Disc
Currency ProfitPetroleum to
GoI
AdjustedEBITDA
Volume COP Others EBITDAFY2015
EBITDA Bridge
FY2015 vs. FY2014 ($mn)
14VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
c.$200mn due to regulatory
changes (additional levies as
per new MMDR Act; royalty
increases; coal cess etc.)
Non Controllable$(216) mn
Controllable $(534) mn
Income Statement
Depreciation
� Lower depreciation rate: Useful life of metal & mining
assets increased with effect from 1 October 2014
Amortisation
� Lower due to lower production at Oil & Gas and Zinc Intl.
Interest Expense
� Refinanced debt at lower cost, debt repayments
Investment Revenue
� Higher MTM gains due to declining interest rates in India
Special items
� Non-cash impairment charge, primarily at
oil & gas assets: $4.5 bn net of tax ($6.7 bn pre-tax)
� Other than impairment, special items of $50mn
Tax Expense
� FY 2014 included one-time reversal due to group
consolidation and simplification completed in Aug 2013
15VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
$mn or as stated FY2014 FY2015
EBITDA 4,491 3,741
Depreciation (1,411) (1,255)
Amortisation (793) (751)
EBIT 2,288 1,735
Interest Expense (1,440) (1,387)
Investment Revenues 688 833
Special Items, FX & Emb. Derivative MTM
(418) (6,821)
Profit Before Tax 1,118 (5,640)
(Tax Expense)/ Tax Credit (129) 1,853
Effective Tax Rate1 13% 32%
PAT 989 (3,788)
Attributable PAT (196) (1,799)
Minorities %1 111% 110%
Underlying PAT 1,370 821
Underlying Attributable PAT 40 (39)
Underlying Minorities %2 97% 105%
1. Excluding Special Items
2. Excluding special items, FX and embedded derivatives
Also refer to Detailed Consolidated Income statement in the financials which shows the income statement with and without special items
Non-Cash Impairment Charge
� Total impairment charge of $4.5 bn net of tax ($6.7 bn pre-tax)
� Oil and Gas
− Non-cash impairment charge taken, following carrying value test in light of steep decline in crude oil
price
− Present value of long term future cash flows based on oil price of $60/bbl in FY2016, increasing to
$84/bbl in FY2020, and an annual escalation of 2.5% p.a. thereafter
− Impairment of Sri Lanka assets of c.$800 mn, due to commercial non-viability
� Konkola Copper Mines, Zambia
− $52 mn impairment of part of Nchanga underground assets on account of maturity of assets and fall
in copper prices
� No impact on company’s financial covenants or its funding position
16VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Strong Financial Profile
� Credit rating of BB-/Ba31
� Cash and Liquid Investments of $8.5bn, additional $1.2bn undrawn
committed lines of credit
� Debt profile: c.50% fixed, 50% floating rate; c.70% USD-
denominated, 30% INR-denominated
� Vedanta Plc Debt maturities
− FY2016: Refinancing in place
− FY2017: Refinancing to be tied up in H2 CY2015
17
Term Debt Maturity Profile (as of 31 March 20152)
Notes:
1. Issue Credit rating of BB-(Negative) by S&P and Ba3(Negative) by Moody’s.
2. Debt numbers shown at face value, excludes one-year rolling working capital facilities of $732mn due in FY 2016.
0.4
2.01.0
2.6
0.3
1.5
2.1
1.3
1.7
1.7
0.7
0.8
2.4
3.3
2.7
4.3
1.0
2.3
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 and later
Debt at VED Plc Term Debt at Subsidiaries
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
25%
11%
7%
14%
35%
7%
Bonds - USD
Bonds - INR
Convertible Bonds - USD
Term Loan - INR
Term Loan - USD
Short Term Loans
Diversified Funding Sources for Term Debt (as of 31 March 2015)
0.61.1 1.2
0.5
0.3
0.2
0.5
0.3
0.50.3
0.3
0.2
1.4
2.7
1.5
2.6
2.0
1.0
FY2014 FY2015 FY2016eoriginal
Oil & Gas Capex¹ Zinc Capex M&M Capex² Free Cash Flow³
� Free cash flow post growth capex of $1bn in a volatile commodity price environment
� Prioritising capital to high-return, low-risk projects, to maximise cash flows
− Oil & Gas
� FY2016 capex revised from $1.2bn to $0.5bn
� Retain the flexibility to invest further $ 1.4bn as oil prices improve
− Gamsberg Project Rephased
� FY2016 capex revised from $250mn to $80mn
FY2016 capex reduced from $2bn to $1bn
Optimising Capex to drive Cash Flow Generation
18VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Notes:
1. Capex net to Cairn India; subject to Government of India approval; O&G refers to Oil & Gas
2. M&M refers to Metals and Mining and Power, excludes Zinc; excludes capex on Lanjigarh refinery expansion and Tuticorin smelter
3. Free cash flow after sustaining capex but before growth capex
Cash Flow and Growth Capex Profile - $bn
FY2016eRevised
FY2014 FY2015
Financial Priorities
19VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Focused on
shareholder returns
and progressive
dividends
Cost SavingsDeleveraging &
Reduction in
Borrowing Cost
Disciplined Capital
Allocation:
Optimising capex,
focus on FCF
Group Structure
Simplification
$
Business Review
Tom Albanese
Chief Executive Officer
Oil & Gas
FY2015 Results
� Gross Average Production: 211,671 boepd
− MBA field stable; Aishwariya field crosses the 30,000 boepd
mark for the first time
− Cambay production up 8% yoy
− Ravva production up 31% yoy in Q4; crosses 30,000 barrels of
oil mark after 3.5 years
� Added Gross 2P reserves of 16 mn boe in FY2015
� Net capex of ~$1.1 bn - 60% Development; 40% Exploration
RJ Exploration
� Executed largest Exploration & Appraisal program till date; 34 E&A
wells drilled
RJ projects
� 1st polymer injected at Mangala in Q3
� Mangala-ASP Pilot successfully completed in Q4
� MPT Facility upgraded to 800 kbfpd in Q3
� Raag Deep Gas Field Development Plan for 100 mmscfd approved,
planning and contracting underway
Barmer Hill
� Large Resource Base: HIIP >2bn; 10-15% recovery factor
� FY15 exit production of 5,000 bopd from Barmer Hill & Satellite
Fields
Outlook
� FY16 production expected to remain stable at FY2015 level
� Potential growth options at Barmer Hill leveraging technology and
existing MPT infrastructure
21VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
MPT: Facility modifications
MPT: Facility modifications
Gas: Commissioning of compressor fansPhase 1:BH-M&A+SFs
Phase 2: BH-DP&NL+SFs
Phase 0: Appraisal PhaseBH-M&A+SFs
Barmer Hill + Satellite Fields Production Potential
(kboepd)
Barmer Hill vs. US Shale
Parameter Unit US Shale Barmer Hill
Porosity % 4-16 15-30
Permeability md 0.001-0.3 0.1-5
Viscosity cP 0.1-0.3 5
HIIP Bn Bbls Large >2
Depth Metres 1,500-3,000 600-1,100
Pay Thickness Metres 15-600 150-300
IP Rate- Horizontal well Bbl/day 900-2,000 700-1,000*
Drilling & Completion Cost/well $ Mn 5-9 5-7*
*IP rates and D&C cost/well in Appraisal Phase at Mangala & Aishwariya Barmer Hill fields
Phase 3: BH-V&V+ SFs
30,000
Rampura Agucha Mine Isometric
Zinc India
FY2015 Results
� Record full year mined metal production of 887 kt
− Refined metal lower at 734 kt due to lower mined metal in H1, as per plan
� Lower silver production due to lower grades at Sindesar Khurd (SK) mine
� Maintained lowest quartile cost position; Q4 CoP lower at $865/t
� Exploration: Gross addition of 1.1 mn tonnes MIC to R&R
Outlook
� FY 2016 mined and refined volumes expected to be higher than FY2015; though Q1 will be lower than average due to mine plan
� Silver production expected at 350 to 400 tonnes due to better grades at SK mine
� COP expected to be stable
MMDR Amendment Act 2015 passed
� Renewal of all leases till at least 2030
� Additional levy of up to 100% of current royalty; potential impact on mining of low grade and deep ore bodies
Projects
� SK mine expansion to 3.75mtpa progressing ahead of schedule
� RAM U/G main shaft sunk to 650m out of 950m; currently producing from decline
� Preparatory work started at RAM open pit to extend mine life to FY2020
22VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Shaft Access
South Ventilation
Shaft
NorthVentilation
Shaft
MainHoistingShaft
Main Decline
Open PitExtension shell
Underground resource:
As Built development
Open PitTo Feb 2015
High Lead Content Deposit
RA UG14 OB
Skorpion LoM Extension
Zinc International
FY2015 Results
� Lower Production at 312 kt
− Lower Lisheen production; expected to end production in
mid FY 2016
− Unplanned disruptions at Skorpion in Jan; now normalised
� Q4 FY2015 COP higher at $1,500/t
Outlook
� FY2016 volume expected at c.220-230kt
� COP expected to remain at current levels of
c. $1450-$1500/t as mines go deeper
Projects
� 250kt Gamsberg Project: Capex re-phased
− First ore production maintained in FY2018
− Breaking ground by end Q2
− Ramp-up in line with capital re-phasing
� Skorpion mine life extension from FY2017 to FY2019
− Deepening of current open pit to access additional
resources
− Mine production will end in FY 2019, and oxide ore
processing will continue till FY 2020 from stockpiles
23VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Production Break-up
67 59
172 150
125102
364312
FY2014 FY2015
BMM Lisheen Skorpion
Currentpitshell
New LOM pushback pit
Original LOM push back pit
Copper - Zambia
FY2015 Results and Initiatives
� Integrated production lower at 117 kt due to shaft
remediation at Konkola, low equipment availability and falling
grades at Nchanga
� Focus on ramping up production at Konkola
− Konkola: Large, long-life, high-grade Copper mine
− Shaft no.1 resumed partial hoisting in March 2015
− Remediation work at Shaft 4 to finish in Q3 FY2016
− Equipment availability steadily improved from 50% to
70% in Q4
� Production at Nchanga dropping due to falling grades and
rising costs; open pit reserves approaching depletion
� At TLP treatment of CRO in addition to LOB ore started to
maximize capacity utilization
Regulatory Update
� Easing of VAT refund procedure will drive higher custom
production and greater smelter efficiencies
� Engaged with the Government on past VAT refunds
� Government has announced intention to reduce royalty rates
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION 24
Notes:
Top right chart: Data set only includes producing mines. Production for Escondida,
Olympic Dam, Antamina and Konkola is as of 2014 March year end.
1. Konkola has Cu grade of 2.80%; Kamoto has Cu grade of 4.70%
2 . Escondida, Collahuasi and Olympic Dam have contained Cu R&R of 101.2mt, 79.8mt and 77.4mt respectively
Top 20 copper mines by contained copper (mt)
Konkola Production Ramp up (kt)
407
11 60
FY 2015 Pivot initiative Equipment FY 2016e
• Shaft remediation
• Waste management
• 950 level debottlenecking
• Remote control units
• Mobile Fleet workshops
• Maintenance improvement
• 70% + availability
Copper – Zambia (contd.)
Cost Reduction Initiatives to drive turnaround
� Rigorous cost saving initiatives being implemented:
reduction of power usage, fuel and chemicals
consumption, and repair & maintenance costs
� Dedicated team working on identified initiatives
� Realized $8mn savings in Q4 FY2015
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION 25
Outlook
� FY2016 total production expected to be 190-210 kt
with integrated production of 120-130 kt at C1
cost of $2.25/lb
� Production expected to ramp up after first quarter
Notes:C1 cash cost excludes royalty, logistics, depreciation, interest and sustaining capex1. Annualised2. Spend base rebased with Q2 FY2015 as 100
Declining trend of absolute and C1 cash costs Volumes
100 9584
306
267
221
Q2 FY2015 Q3 FY2015 Q4 FY2015
Average spend base² C1 cash cost (US c/lb)
46 40 43
2724 21
5652 49
5352 66
181168
179
190-210
FY2014 FY2015 Q4 FY2015¹ FY 2016
Konkola Nchanga TLP Custom
Integrated120-130kt
Custom70-80kt
Aluminium Costs and Margins (in $/t, for FY2015)
Aluminium
FY2015 Results
� Record production of c.1mt at alumina refinery
� Record Aluminium production, new Jharsuguda-II and Korba-II smelters started up
� CoP higher at $1,755/t¹ due to higher alumina and coal e-auction prices− Coal supplies improving with higher e-auction volumes in Q4
� Ingot premiums softening; focus on value added products
� Raw material linkages: − Laterite mines and Chotia coal block to commence production
in FY2016.− Increased bauxite production at BALCO− MMDR Act to facilitate auctions of bauxite deposits
Outlook
� BALCO-II: additional pots expected to ramp up from May, full smelter to ramp up over the year
� Jharsuguda-II: additional pots expected to ramp up from June, with each line of 312kt taking c. 6 months for ramp up; plan to start 2 lines sequentially
� FY 2016 production: +1 mn tonnes
� FY 2016 COP: $1,650-1,700/tonne
� Balco 1,200 MW (4x300 MW) power plant:− Unit I – Commercial: Trial runs commenced; to be
commissioned in Q1 − Unit II- Captive: Commissioning in Q1
26VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
245
500
325
1,250 2,320
BALCO 245kt
(Operating)
J'guda 500kt
(Operating)
BALCO 325kt
Project
J'guda 1.25mt
Project
Total Aluminium
Capacity
Roadmap to 2.3mtpa Aluminium Capacity(in ktpa)
1st phase: 84 pots commissioned; Further pots to
gradually ramp up in FY16
50+pots started and under trial
runs
Operating smelters Capacity under commissioning Capacity to be commissioned
Notes:1. Including CoP of Balco-II smelter; excluding this CoP is $1,718/t
1,890
37985 2,355
480(672)
(373) (48) (44) (11)
LME Ingot
Premium
Value
Addition
Total
Realisation
Alumina
Cost
Power Cost Other Hot
Metal
Costs
Ingot
Conversion
Costs
Value
Addition -
ConversionCosts
Others EBITDA
Value added production increased to 51%
Captive bauxite can significantly reduce this
92& capex spent
86% capex spent
Other Assets – Power, Iron Ore and Copper - India
27VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Karnataka:
� Recommenced mining @ 2.3 mtpa in Feb
2015
Goa
� MOEF reinstated Environment clearances
for state in March
� Received allocation of interim capacity of
c.5.5mtpa of saleable ore; mining
expected to commence post monsoons
� Export duty on low grade ore reduced
from 30% to 10%
� Cost optimisation initiatives underway
� Pig Iron EBITDA margin of $70/t
Jharsuguda 2,400MW:
� 39% PLF during the year due to low
demand
� To commence supplying power to 1.25mt
Aluminium smelter in June; will drive
higher PLF in FY2016
TSPL:
� Unit I capitalised in December
� Units II and III expected to start in H1
FY2016
� EBITDA margin of Rs. 1/unit in the near
term
Appointed Power CEO to leverage
synergies across 9 GW power portfolio
Tuticorin Smelter:
� Record production; 91% capacity
utilisation
� 90%+ utilisation going forward
� 29% higher TcRc at 21.4c/lb
− CY15 global TcRc settled higher;
expected FY2016 realisations of over
24c/lb
� 160 MW power plant operated at 86%PLF
Power Iron Ore Copper India
Production Growth and Asset optimisationOperating at full capacity
Strengthening the Balance SheetReduce Gearing; maximise free cash flows
Identify next generation of ResourcesContinue to add R&R
Simplification of the Group structure
Protect and preserve our License to Operate
Focused on maximizing free cash flows, progressive dividend and deleveraging
Strategic Priorities
28VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Appendix
Segment Wise Summary
30VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Oil & Gas FY2014 FY2015
Average Daily Gross Operated
Production (boepd) 218,651 211,671
Rajasthan 181,530 175,144
Ravva 27,386 25,989
Cambay 9,735 10,538
Average Daily Working Interest
Production (boepd) 137,127 132,663
Rajasthan 127,071 122,601
Ravva 6,162 5,847
Cambay 3,894 4,215
Average Brent (US$/bbl) 107.6 85.4
Average realizations Oil & gas (US$/boe) 94.5 76.0
EBITDA ($mn) 2,347 1,477
Zinc-India FY2014 FY2015
Mined Metal (kt) 880 887
Refined Zinc – Integrated (kt) 743 721
Refined Lead – Integrated (kt)1 105 111
Saleable Silver – Integrated (moz) 9.774 8.552
Average Zinc LME ($/t) 1,909 2,177
Zinc CoP2 ($/t) 817 868
EBITDA ($mn) 1,145 1,193
1. Excludes captive consumption2. Excluding royalty. Revenues from silver not credited to CoP. With IFRIC adjustment. Without IFRIC
adjustment, the COP was $837/t in FY2014 and $870/t in FY2015
Zinc-International FY2014 FY2015
Mined Metal – Lisheen & BMM (kt) 239 209
Refined Zinc – Skorpion (kt) 125 102
Total Zinc-Lead Metal 364 312
CoP ($/t) 1,167 1,393
EBITDA ($mn) 213 181
Segment Wise Summary contd.
31VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Copper-India/Australia FY2014 FY2015
Mined Metal – Australia (kt) 18 -
Copper Cathodes– India (kt) 294 362
Tuticorin Power Plant (mu) 601 641
Average Copper LME ($/t) 7,103 6,558
Copper Tc/Rc 16.6 21.4
Conversion cost – India (c/lb) 9.7 4.2
EBITDA ($mn) 198 281
Copper-Zambia FY 2014 FY 2015
Mined Metal (kt) 72 65
Finished Metal – Total (kt) 177 169
Integrated (kt) 124 117
Custom Smelting (kt) 53 52
Copper LME ($/t) 7,103 6,558
C1 Cash Cost – Integrated1 (USc/lb) 238 258
Total Cash Cost– Integrated2 (USc/lb) 334 329
EBITDA ($mn) 156 (4)
PAT ($mn)3 (90) (191)
1. C1 cash cost, excludes royalty, logistics, depreciation, interest, sustaining capex2. Total Cash Cost includes C1 cash cost, royalty, interest and sustaining capex3. Includes special items of $61mn in FY2015 and $51mn in FY2014
Aluminium FY2014 FY2015
Aluminium Production (kt) 794 877
Jharsuguda-I 542 534
Jharsuguda-II - 19
Korba-I 245kt 251 253
Korba-II 325kt 1 71
Aluminium LME ($/t) 1,773 1,890
Aluminium COP ($/t)1 1,658 1,755
BALCO 1,781 1,961
Jharsuguda-I 1,602 1,630
Alumina Production (kt) 524 977
Alumina COP ($/t) 358 356
EBITDA ($mn) 287 415
1. 1.Including CoP of new Balco-II smelter; excluding this smelter CoP is $1,718/t
Segment Wise Summary contd.
32VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Iron Ore and Pig Iron FY2014 FY2015
Sales (mt) 0.0 1.2
Goa - -
Karnataka 0.0 1.2
Production 1.5 0.6
Goa - -
Karnataka 1.5 0.6
Average Net Sales Realizations ($/t) 32.0 28.0
Pig iron - Production (kt) 510 611
Met coke – Production (kt) 408 500
EBITDA ($mn) (24) 31
Power FY2014 FY2015
Power Sales (mu) 9,374 9,859
Jharsuguda 2,400MW 7,625 7,206
BALCO 270MW 390 89
BALCO 600MW - 10
MALCO 911 897
Talwandi Sabo - 1,213
HZL Wind Power 448 444
Power Realisation 1(Rs/u) 3.54 3.25
Power Cost of generation (Rs/u) 2.23 2.14
EBITDA ($mn) 168 154
1. Excluding Talwandi Sabo
Entity Wise Financials
($mn or as stated)VED Plc Consol KCM Plc Cos Elim
VED Ltd Consol
VED Ltd stand-alone
Cairn India HZL ZI BALCO CMT MALCO TS TSMHL Others¹ Elim
Group Revenue 12,879 1,077 - (174) 11,976 5,290 2,397 2,386 587 784 1 87 81 - 1,021 (659)
EBITDA 3,741 (4) (1) - 3,745 795 1,477 1,220 181 60 (34) 25 22 (0) 2 (3)
Depreciation (1,254) (187) (0) 2 (1,069) (220) (573) (126) (86) (33) (11) (2) (8) - (11) 0
Amortisation (751) (1) - 0 (751) (7) (698) (13) (25) (4) - - 0 - (4) -
Special Items (6,744) (61) 0 - (6,684) (33) (6,642) (0) - (5) - - - - (4) -
Operating Profit (5,009) (252) (1) 2 (4,759) 535 (6,436) 1,081 70 18 (45) 24 14 (0) (16) (3)
Investment Revenue 833 0 338 (375) 869 367 295 461 8 3 0 1 - 141 167 (575)
Finance Cost (1,387) (67) (547) 264 (1,038) (657) (15) (4) (7) (23) (2) (33) (14) (326) (39) 83
Other Gains/ (Losses) (77) - 2 0 (79) (31) (21) 0 - (5) - 0 (20) - (1) -
Profit Before Taxation (5,640) (318) (207) (108) (5,006) 213 (6,177) 1,538 71 (7) (47) (8) (20) (185) 111 (495)
Current Tax (571) (1) (0) (46) (524) (9) (164) (325) (19) - 0 - - - (7) -
Deferred Tax 2,423 128 - (1) 2,297 (5) 2,148 147 5 8 (4) 0 - - (3) (0)
Profit after tax (3,788) (191) (207) (155) (3,233) 199 (4,193) 1,361 56 2 (51) (8) (20) (185) 101 (495)
Attributable to equity holders (1,798) (152) (207) (155) (1,284) 124 (1,584) 547 34 1 (32) (6) (12) (114) 64 (307)
Underlying PAT 821 (183) (209) (155) 1,369 246 332 1,361 56 8 (51) (8) 0 (185) 104 (495)
Underlying Attributable PAT (39) (146) (209) (155) 471 153 125 547 34 3 (32) (6) 0 (114) 67 (307)
Property Plant and Equipment² 15,411 1,899 0 - 13,512 6,156 1,726 1,872 220 1,822 13 23 1,673 - 7 -
Mining Reserve 2,372 - - - 2,372 715 1,207 61 98 16 - - - - 275 -
Exploratory Assets 5,569 - - - 5,569 32 5,173 - 139 - - - - - 225 -
33
Notes:
1. Includes Fujairah Gold, GEPL, Sesa Resources Ltd, SMCL, VGCB, WCL, and other Vedanta Ltd Investment companies.
2. Includes Capital Work in Progress.
FY2015
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Entity Wise Cash and Debt
34
Notes:
Debt numbers at Book Values, as of 31 March 2015. Since the table above shows only external debt, it does not include the following:
- $2.6bn inter-company receivable at Vedanta plc from TSMHL. There was an accrued interest of $16mn on the inter-company receivable, as of 31 March 2015.
- $1.25bn two-year intercompany facility from Cairn India Limited to a wholly owned overseas subsidiary of Vedanta Ltd. in Q1 FY2015, which was fully disbursed during H1 at arm’s length terms and conditions
with an annual interest rate of LIBOR+300bps. The wholly owned overseas subsidiary has used the proceeds of $1.25bn to pay $450mn accrued interest and $800mn of the principal of the separate
intercompany debt extended from VED plc to SSLT.
- $235mn receivable at plc from KCM
1. Includes Investment Companies.
2. Twin Star Mauritius Holdings Limited (SPV holding the 39.4% stake in Cairn India as on 31 March 2015).
3. Others include: CMT, Fujairah Gold, MEL, Sesa Resources Ltd, VGCB, and Vedanta Ltd. Investment companies.
4. Includes $14mn debt related derivative asset
5. Includes $8mn debt related derivative asset
6. Includes $2mn debt related derivative liability.
Net Debt Summary ($mn)
31 March 2014 30 Sept 2014 31 March 2015
Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt
Vedanta plc1 8,323 16 8,307 7,532 59 7,473 7,707 34 7,673
KCM 733 10 723 813 0 813 802 65 738
Vedanta Ltd. Standalone 5,011 427 4,585 5,407 519 4,889 4,574 135 4,439
Zinc International - 169 (169) - 189 (189) - 137 (137)
Zinc India - 4,345 (4,345) - 4,478 (4,478) - 4,937 (4,937)
Cairn India - 3,912 (3,912) - 2,732 (2,732) - 2,857 (2,857)
BALCO 679 0 679 739 5 734 767 0 766
Talwandi Sabo 835 4 831 940 2 939 1,037 24 1,013
TSMHL2 1,190 8 1,181 1,680 166 1,514 1,679 9 1,670
Others3 100 47 53 123 23 100 102 12 90
Vedanta Ltd. Consolidated 7,815 8,912 (1,097) 8,889 8,112 777 8,159 8,111 48
Total (in $mn) 16,871 8,938 7,9204 17,234 8,171 9,0555 16,668 8,210 8,4606
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Inter-company Debt
During FY2015
� Cairn India lent $1.25bn to a
wholly owned overseas
subsidiary of Vedanta Ltd
� Vedanta Ltd paid $0.8bn
towards principal payable to
Vedanta plc, and $0.45bn
towards related accrued
interest
35
Vedanta Ltd.(excluding Cairn India) 31 March 2014 31 March 2015
AnnualizedInterest Cost
Gross External Debt 7,919 8,202 c.650
Intercompany Payable to Vedanta 3,894 2,590 200
Intercompany Payable to Cairn India - 1,250 40
Debt Service Liability 11,813 12,042 890
Vedanta Resources plc 31 March 2014 31 March 2015Annualized
Interest Cost
Gross External Debt 8,511 7,891 c.500
Intercompany Receivable at Plc from Vedanta Ltd (3,894) (2,590) (200)
Debt Service Liability 4,617 5,301 300
Cairn India Ltd. 31 March 2014 31 March 2015Annualized
Interest Cost
Intercompany Receivable at Cairn India from Vedanta Ltd
- (1,250) (40)
Debt Service Liability(in $mn)
Notes: Debt numbers at Face Values. Annualized interest cost represents an approximate annual interest cost based on debt levels as of 31 March 2015, and excludes accretive interest on convertible bonds and
amortisation of borrowing costs.
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
7,920
221
1,531
819
511
260 8,460
(2,802)
Opening Net Debt(1 Apr 2014)
Cash Flow fromOperations¹
Sustaining Capex Project Capex Subsidiary sharepurchases
Shareholder andMinority Dividends
Others Closing Net Debt(31 March 2015)
Net Debt Reconciliation
FY2015 ($mn)
36
Notes:
1. Excludes sustaining capex.
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Project Capex
37
Capex in Progress StatusCapex
(US$mn)Spent up to March 2014
Spent in FY2015
Unspent as at 31 March 2015
Cairn India Phase wise completion ($500 mn to be spent in FY16 and retain the flexibility to invest balance $1.4 bn as oil prices improve and costs bottom out)
3,030 - 1,080 1,949
Total Capex in Progress - Oil & Gas 3,030 - 1,080 1,949
Aluminium Sector
BALCO – Korba-II 325ktpa Smelter and 1200MW power plant(4x300MW)
Smelter: 84 post capitalised in Sep 20141,872 1,721 98 53
Lanjigarh Refinery (Phase II) – 4mtpa Awaiting approval 1,570 809 - 761
Jharsuguda 1.25mtpa smelterPotline-wise commissioning: 1st phase of 50 pots started
2,920 2,500 35 385
Power Sector
Talwandi 1980MW IPP Unit II under Trial Run 2,150 1,869 142 139
Zinc Sector
Zinc India (Mines Expansion) Phasewise Completion 1,500 435 167 898
Zinc International
Gamsberg Mining Project Capex Rephased 630 - 5 625
Skorpion Refinery Conversion 152 - 4 148
Total Capex in Progress –Metals & Mining 10,794 7,334 451 3,009
Capex Flexibility
Copper Sector
Tuticorin Smelter 400ktpa EC awaited 367 129 - 239
Total Capex Flexibility 367 129 - 239
Total Capex (Excluding Cairn) 11,161 7,463 451 3,247
Total Capex (Including Cairn) 14,191 7,463 1,531 5,197
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Credit Metrics
FY2014 FY2015 Covenant
Net Debt/EBITDA 1.8x 2.3x < 2.75x
EBITDA/Net Interest Expense1 8.4x 6.8x > 4.0x
Net Assets/Debt 2.2x 1.9x > 1.75x
Gearing2 30.6% 40.8%
Gearing – pre-impairment2 30.6% 33.5%
38
Notes:
1. Interest includes Capitalized Interest.
2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity.
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Currency and Commodity Sensitivities
39
Commodity prices – Impact of a 10% increase in Commodity Prices
Commodity
FY2015
Average price
FY2015
EBITDA ($mn)
Oil ($/bbl) 85 190.1
Zinc ($/t) 2,177 198.0
Aluminium ($/t) 1,890 138.8
Copper ($/t) 6,558 108.6
Lead ($/t) 2,021 28.2
Silver ($/oz) 18.1 17.0
Foreign Currency - Impact of a 10% depreciation in FX Rate
Currency
FY2015
Average FX rate
FY2015
EBITDA ($mn)
INR/USD 61.1471 185.9
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Sales Summary
Sales volume FY2014 FY2015
Iron-Ore Sales
Goa (mn DMT) - -
Karnataka (mn DMT) 0.03 1.2
Total (mn DMT) 0.03 1.2
MetCoke (kt) 413 505
Pig Iron (kt) 543 605
Copper-India Sales
Copper Cathodes (kt) 174 191
Copper Rods (kt) 123 171
Sulphuric Acid (kt) 514 504
Phosphoric Acid (kt) 116 193
Copper-Zambia Sales
Copper Cathodes (kt) 177 163
Power Sales (mu)
Jharsuguda 2,400MW 7,625 7,206
TSPL - 1,213
BALCO 270MW 390 89
BALCO 600 MW - 10
MALCO 911 897
HZL Wind power 448 444
Total sales 9,374 9,859
Power Realisations (INR/kWh)
Jharsuguda 2,400MW 3.3 3.0
TSPL - 5.1
BALCO 270MW 3.9 2.9
MALCO 5.5 5.5
HZL Wind power 4.0 3.5
Average Realisations13.5 3.3
Power Costs (INR/kWh)
Jharsuguda 2,400MW 2.1 2.0
TSPL - 4.2
BALCO 270MW 2.9 4.0
MALCO 3.9 3.8
HZL Wind power 0.5 0.6
Average costs 2.2 2.1
40VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
Sales volume FY2014 FY2015
Zinc-India Sales
Refined Zinc (kt) 751 736
Refined Lead (kt) 121 129
Zinc Concentrate (DMT) - -
Lead Concentrate (DMT) - -
Total Zinc (Refined+Conc) kt 751 736
Total Lead (Refined+Conc) kt 121 129
Total Zinc-Lead (kt) 872 865
Silver (moz) 11.3 10.5
Zinc-International Sales
Zinc Refined (kt) 125 98
Zinc Concentrate (MIC) 176 158
Total Zinc (Refined+Conc) 301 256
Lead Concentrate (MIC) 59 48
Total Zinc-Lead (kt) 360 304
Aluminium Sales
Sales - Wire rods (kt) 286 310
Sales - Rolled products (kt) 51 46
Sales - Busbar and Billets (kt) 121 116
Total Value added products (kt) 458 472
Sales - Ingots (kt) 335 406
Total Aluminium sales (kt) 793 878
Notes:1. Excluding TSPL
Group Structure
41
Konkola Copper
Mines (KCM)
62.9%
Vedanta Resources Plc
100%64.9%
Zinc India(HZL)
AustralianCopper Mines
Vedanta Ltd
Cairn India
59.9%
79.4%
Subsidiaries of Vedanta Ltd
� Sesa Iron Ore
� Sterlite Copper (Tuticorin)
� Power (2,400 MW Jharsuguda)
� Aluminium
(Odisha aluminium and power assets)
Divisions of Vedanta Limited
Option to increase stake
to 94.4%
Unlisted entitiesListed entities
Talwandi Sabo Power (1,980 MW)
100%
MALCO Power
(100 MW)
100%
Skorpion & Lisheen -
100%BMM -74%
100%
Zinc International
51%
Bharat Aluminium (BALCO)
Option to increase stake
to 100%
100%
Western Cluster
(Liberia)
VEDANTA RESOURCES PLC – FY2015 RESULTS PRESENTATION
NotesShareholding based on basic shares outstanding as on 31 March 2015