1. Vedanta Q2 net jumps 43% to Rs 2,036 crore

Vedanta Q2 net jumps 43% to Rs 2,036 crore

The consolidated net profit of diversified natural resources company Vedanta Ltd surged 43% to Rs 2,036 crore for the three months ended September 30, 2017.

By: | Mumbai | Published: November 3, 2017 6:23 AM
Vedanta, Q2 results,  zinc, copper , net profit, Copper India, Zinc India The consolidated net profit of diversified natural resources company Vedanta Ltd surged 43% to Rs 2,036 crore for the three months ended September 30, 2017 (reuters)

The consolidated net profit of diversified natural resources company Vedanta Ltd surged 43% to Rs 2,036 crore for the three months ended September 30, 2017, because of good operational performance in zinc and copper businesses, supported by strong commodity prices. The company had clocked a consolidated net profit (attributable before exceptional items) of Rs 1,424 crore during the July-September period of 2016. The Indian subsidiary of London-listed Vedanta Plc, reported a y-o-y increase of 36% in revenues to Rs 21,590 crore with higher volumes at Copper India, Zinc India, Zinc International, ramp up in aluminium business and higher commodity prices. However, these gains were partially offset by currency appreciation and lower volumes at oil & gas.

Speaking to newspersons on a conference call, Kuldip Kaura, chief executive officer, Vedanta Ltd, said the company registered record quarterly copper cathode production of 106,000 tonne, while at Zinc International, it had the highest quarterly production of 20,000 tonne at Black Mountain in last four years and Gamsberg is on track for mid production by middle of calendar year 2018. “In the oil and gas business, we commenced 15 well infill drilling campaign at Mangala and first well was brought online. At Zinc India, there has been record silver production and refined zinc-lead metal production at 230,000 tonne, up 27% y-o-y. The aluminium production was 401,000 tonne,” he said. On the oil and gas business, Sudhir Mathur, CEO (oil & gas) of Vedanta, said the company is planning to start exploration in Krishna-Godavari (KG) basin during March-May 2018.

During the quarter, the Ebitda (earnings before interest, tax, depreciation and amortisation) was up 24% y-o-y at Rs 5,776 crore. The Ebitda margins was lower by 400 basis points at 35%, which was excluding custom smelting at Copper India and Zinc India operations. As for company’s debt reduction plans, Kaura said the gross debt has been reduced by Rs 11,466 crore (excluding repayment of temporary borrowing by Zinc India) since March 2017, while the net debt to Ebitda is at 0.6X. As on September 30, 2017, Vedanta’s gross debt stood at Rs 55,798 crore, including temporary short-term borrowings of Rs 593 crore at Zinc India and preference shares of Rs 3,010 crore issued pursuant to the Cairn merger. At end of June, the gross debt of the company was at Rs 67,342 crore. Finance cost during the quarter was Rs 1,384 crore, lower by Rs 67 crore on a y-o-y basis on account of lower debt level due to de-leveraging during H1FY18 and lower interest rates. It was partially offset by interest cost on temporary borrowing at Zinc India which was repaid towards the end of the quarter, and interest on preference shares issued to the shareholders of Cairn India pursuant to the merger with the company. GR Arun Kumar, chief financial officer, said the company’s plan on capital expenditure of about Rs 7,000 crore for the financial year 2017-2018 remains unchanged. Of this, 60% will go towards the zinc business, 30% to oil and gas and the remaining 10% towards other businesses.

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