Sterlite Industries FY07 & Q4 results

Full Year Consolidated Revenues up 86% to Rs 24,387 crore

Full Year Consolidated PAT soars 169% to Rs 4,387 crore

Sterlite Industries (India) Limited ("Sterlite") today announced results for the full year ("FY 2007") and quarter ("Q4") ended 31 March 2007. Consolidated revenues and net profits for Q4 were Rs 6,252 crore and Rs 1,718 crore, an increase of 23% and 51%, respectively, over the corresponding prior period. For FY 2007, consolidated revenues and net profits were Rs 24,387 crore and Rs 6,546 crore, a year on year increase of 86% and 192% respectively.

Copper cathode production in FY 2007 and Q4 was 313,000 tonnes and 89,000 tonnes as compared to 273,000 tonnes and 75,000 tonnes respectively, representing an increase of 15% and 19% over the corresponding prior periods due to de-bottlenecking of our facility at Tuticorin. Production after successful debottlenecking is steadily ramping up and contributing towards additional volumes in Q4, with production close to rated capacity in March 2007. The Tuticorin smelter was under planned shutdown for eight days in the first week of April 2007 for carrying out modifications and improvements, at the sulphuric acid plant.

Mined metal production at our Australian mines of 6,000 tonnes in Q4 is lower than that of the corresponding period in the previous year due to a temporary two-week disruption in the mining activities as a result of minor rockfall incident. Post investigation of the incident by an independent expert, the site was declared safe and mining activities were restored in the month of March 2007, which are expected to pick up to normal levels in the current quarter.

Sterlite continues its efforts to increase value added copper rod production and has produced 177,734 tonnes in FY 2007, an increase of 7% over FY 2006.

Revenues for Q4 and FY 2007 were Rs 2,943 crore and Rs 11,727 crore, an increase of 19% and 59%, respectively year on year. The increase in revenues was primarily on account of increase in volumes coupled with significant increase in LME prices. EBIDTA for FY 2007 was Rs 1,814 crore, an increase of 70% compared with FY 2006, primarily on account of better TCRC realisations, an increase in LME prices and a reduction in unit costs, which were partially offset by a reduction in import tariffs to 7.5% in FY 2007 from 10.0% in FY 2006.

Average TCRC realisations for FY 2007 improved significantly to 31.2 USc/lb from 23.1 USc/lb in FY 2006 on the back of strong market conditions and due to the benefit of price participation from high LME prices on a part of the frame tonnages. In the current financial year, TCRC realisations are softening and we expect this to impact profitability of the copper smelting business in FY 2008.

Aluminium Business "� Bharat Aluminium Company Limited ("BALCO")

Production of 313,000 tonnes of aluminium in FY 2007 was significantly higher than that of the previous year at 174,000 tonnes as a result of increase in production due to the full ramp-up of the new Korba smelter, which produced 208,000 tonnes during the year. The stabilisation process of the new Korba smelter was quicker than estimated and as a result the plant has consistently achieved rated capacity in the last two quarters with the fourth quarter output at 62,000 tonnes, taking the total aluminium production in Q4 to 89,000 tonnes. The existing smelter at BALCO produced about 28,000 tonnes this quarter, in line with its rated capacity. The captive power plant continues to operate satisfactorily and in the current quarter has achieved its highest level of generation, impacting costs positively.

Revenues for Q4 and FY 2007 were Rs 1,279 crore and Rs 4,100 crore, an increase of 50% and 117%, respectively compared with the corresponding prior periods. The increase was primarily due to an increase in production volumes and higher LME prices.

EBIDTA for Q4 and FY 2007 was Rs 621 crore and Rs 1,683 crore, an increase of 112% and 209%, respectively year on year. The improvement in profitability was on account of increase in production volumes from BALCO's new Korba plant, higher LME prices and achieved operational efficiencies.

Zinc Business "� Hindustan Zinc Limited ("HZL")

Refined zinc production during FY 2007 was 348,000 tonnes, compared with 284,000 tonnes in FY 2006, up by 23% due to the ramp-up of new hydro smelter at Chanderiya. The total zinc production in Q4 was 95,000 tones.

Mined zinc metal production was 505,000 tonnes for FY 2007 representing an increase of 7% over the corresponding previous year. The increase in production was primarily due to improved production from Rampura Agucha mines. HZL also exported 70,301 dry metric tonne ("dmt") and 313,299 dmt of zinc and lead concentrate during Q4 and FY 2007 respectively.

Revenues for Q4 and FY 2007 were Rs 2,030 crore and Rs 8,560 crore, an increase of 14% and 121%, respectively year on year. EBIDTA for Q4 and FY 2007 was Rs 1,475 crore and Rs 6,644 crore, an increase of 11% and 176% respectively year on year. The increase in net profits in Q4 and FY 2007 was on account higher metal volume and higher prices.

The construction activities of the new 170,000 tpa Chanderiya hydro smelter and associated captive power plant are progressing on schedule, to be commissioned by early 2008. Work on the debottlenecking project at HZL to increase the capacity by 88,000 tonnes and new captive power plant of 80 MW at Zawar is progressing well and will be completed as per schedule in early 2008.

As regards the green energy project undertaken by HZL, a turnkey contract for 125 MW wind power plant had been placed, of which the first phase of 38.4 MW was commissioned in March 2007 in the State of Gujarat in India. The remaining capacity is expected to be commissioned progressively during FY 2008.

Power Business "� Sterlite Energy Limited

Basic engineering work on the new Rs 8,730 crore greenfield 2,400 MW integrated power project at Jharsuguda has recently commenced. The project is progressing as per schedule.