Vedanta's Indian arm produces flat revenues as zinc adds shine
Despite the challenges of the commodity market, Vedanta Resources's 63%-owned Indian holding company Vedanta Limited produced largely flat first quarter revenues compared to the same time last year thanks to a strong performances from copper and zinc production units.
FTSE 250
20,531.30
17:09 09/05/24
FTSE 350
4,606.39
17:09 09/05/24
FTSE All-Share
4,558.37
16:50 09/05/24
Mining
10,497.33
17:09 09/05/24
Vedanta Resources
832.60p
16:35 28/09/18
Revenues in the quarter were down just 1% at INR16,952 crore ($2.59bn) despite the 44% oil price decline laying a significant weight on the results.
But the oil slump was mostly offset by higher revenues from Copper India with comparisons benefitting from a maintenance shutdown in the equivalent period last year, higher volumes in Zinc India, and a new contribution from the first unit of the new Talwandi Sabo Power thermal power plant in the Punjab region.
Mumbai-listed Vedanta Ltd, which was renamed from Stesa Sterlite in April this year, generated flat earnings before interest, tax, depreciation and amortisation (EBITDA) of 4,039 crore rupees, with EBITDA margin at 31% up from 28%.
Attributable profit after tax was up 76% to INR866 crore and the balance sheet finished in healthy condition, with cash and equivalents of over INR47,000 crore.
Vedanta Ltd owns 60% of Cairn India and parent Vedanta Resources recently said the proposed buyout of the rest of Cairn was "on track". The FTSE 100 giant last month announced it would offer one share in Vedanta Ltd for each share held by minority shareholders in Cairn India as a means of merging the two companies.
Read more: Vedanta and Cairn India agree $2.3bn merger
On the Indian company's results, chief executive Tom Albanese said: "In Q1 we saw continued volatility in commodity prices, but Zinc has held up quite well in view of its strong fundamentals and is now the largest contributor to our EBITDA.
"We continue to focus on improving efficiency, costs, and enhancing production across our well-invested asset base."
He pointed to recent breaking of ground at the Gamsberg zinc project in South Africa and added that the company remained on track to re-start iron ore production at Goa following the monsoons.
"Our diversified business model supported by strong operating strengths and structurally low cost assets will enable robust long term returns to stakeholders."
Shares in the London-listed parent were down 1.25% to 396.2p by 1405 BST on Wednesday, despite the Mumbai company being up 1.1% at INR130.