Mining major Vedanta (VEDL) has posted a consolidated net loss of Rs 1,783 crore for the quarter ended September, hit mainly by a one-time exceptional item following the adoption of new tax rate. In comparison, the company had posted a net profit Rs 1,808 crore in the year-ago quarter.
The company also got board approvals to invest Rs 2,650 crore to increase its ferrochrome production in India to 450,000 tonne per annum.
During the quarter under review, billionaire Anil Agarwal-led VEDL’s revenue rose 6.3% to Rs 38,945 crore from Rs 36,654 crore recorded during the same year-ago period.
The metals-to-mining conglomerate, a subsidiary of London-headquartered Vedanta Resources, posted a 49.1% rise in Ebitda at Rs 11,479 crore, it said in a statement.
The net loss came as a surprise as a consensus estimate by Bloomberg analysts was expecting the firm to post a consolidated net profit of Rs 692 crore. However, its revenue and Ebitda were above Street expectations. The consensus estimate for revenue was at Rs 31,868 crore and Ebitda at Rs 6,372 crore.
VEDL had a one-time net tax impact of Rs 6,128 crore as a result of the adoption of a new tax regime, effective FY23. During the quarter, it had opted to adopt a new tax regime and the first tax return under the regime will be filed for FY23 on or before November 30. The company posted a net profit of Rs 4,403 crore before the exceptional item, it added.
On October 20, Hindustan Zinc (HZL), which contributes majority to its revenue, reported a 35.5% fall in consolidated net profit at Rs 1,729 crore for the September quarter. Agarwal-helmed Vedanta holds a 64.92% stake in HZL, a producer of zinc, lead and silver.
The company also got board approvals to invest Rs 2,650 crore to increase its ferrochrome production in India to 450,000 tonne per annum from 150,000 tonne per annum. This would be funded by debt (70%) and internal accruals, and the project is expected to be completed over two years.
In Q2, VEDL generated free cash flow (pre-capex) of Rs 5,694 crore, up 84% on a quarter-on-quarter basis, while net debt fell by Rs 1,420 crore on a quarter-on-quarter basis to Rs 57,771 crore as on September 30.
Vedanta executive director Arun Misra said: “Strong believer of expanding our portfolio, we are steadfast in our growth journey and are progressing well in all growth projects announced so far with capex worth $8.4 billion. With this, our revenue is estimated to uptick by $4 billion and Ebitda by $1 billion”.
“We remain well-positioned, with a rich diversified asset portfolio, strong balance sheet, and cost optimisation levers, to withstand a challenging macroeconomic environment,” he added.
The company also got board approvals to invest Rs 2,650 crore to increase its ferrochrome production in India to 4.50 lakh tonne per annum from 1.50 lakh tonne per annum. This would be funded by debt (70%) and internal accruals, and the project is expected to be completed over two years.
This is with an aim to become the largest producer of ferrochrome in India, it added.
VEDL said its key businesses continue to deliver strong operating performance. Its aluminium production was highest-ever at 594 kilo tonne (kt), a 3% rise on a QoQ basis and a 2% rise on YoY, and that of alumina was at 464 kt, a 17% QoQ and 2% YoY rise. VEDL’s cathode production was 35 kt, up 14% QoQ and down 14% YoY.