Diversified natural resources company Vedanta Ltd’s attributable profit after tax before exceptional items at a consolidated basis surged 40% year-on-year basis to Rs 3,956 crore for the three months ended March 31, 2018, largely helped by an exceptional gain of Rs 2,869 crore. The exceptional item mainly comprises reversal of previously recorded impairment of Rs 7,016 crore at the company’s oil and gas business partly offset by impairment of iron ore Goa assets, among others.
The Indian subsidiary of London-listed Vedanta Plc, reported a y-o-y increase of 17% in income from operations on a consolidated level of Rs 27,630 crore. This was primarily on account of higher volume from oil and gas, aluminium, copper India business and improved commodity prices, partially offset by currency appreciation and lower volume at Zinc India as per mine plan. Record production in aluminium business, capitalisation of pot relining expenses and improved commodity prices led to a 9% y-o-y increase in the operating income (earnings before interest, tax, depreciation and amortisation) to Rs 7,929 crore. This was partly offset by input commodity inflation and currency appreciation. EBITDA margins were lower by 600 basis points to 38% in the three months of January-March 2018.
For the full year ended March 31, 2018, the company posted a 10% rise in the attributable PAT to Rs 8,025 crore, the revenues increased 22% to Rs 92,923 crore, while EBITDA was up 19% to Rs 25,470 crore, compared to a year ago. The company management said that EBITDA margins of 36%, which were 300 basis points lower compared to FY17, were industry leading. Speaking to newspersons on a conference call, Kuldip Kaura, chief executive officer, Vedanta Ltd, said oil and gas will be major growth areas in the capex cycle. The company has a capex plan of $2.5 billion-$3 billion for the same.
“Our aim is to double the oil production from current levels to 350,000 barrels/day in the next three years and the vision is to take it up to 500,000 barrels/day in the future and also double gas production,” he said. He added that the company has invested in Zinc India’s ramp up and is on track for up to 1.2 million tonne, and plans to take it up to 1.35 million tonne in the next three years. Going forward, he said the realisations from aluminium and copper will go up due to company’s continuing efforts in increasing production of value added products.
As for company’s debt reduction plans, Kaura said the gross debt has reduced by Rs 8,512 crore since March 31, 2017, while net debt/EBITDA at 0.9x. Gross debt stood at Rs 58,159 crore as on March 31, 2018, including preference shares of Rs 3,010 crore issued pursuant to the Cairn merger. The company has declared an interim dividend of Rs 7,881 crore in March 2018 and has cash and liquid investments of Rs 36,201 crore.