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Vedanta PAT up 17%; crude, copper pull down revenue

BS Reporter / New Delhi 28 Oct 16 | 03:16 PM

Vedanta, the London-based diversified natural resources company, reported a 17 per cent increase in profit after tax (PAT) at Rs 1,252 crore for the September quarter, mainly on strong operating performance and higher commodity prices.

Revenue was down 4 per cent from the same period a year before, to Rs 15,666 crore.

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“Our Ebitda (operating earnings) margins have risen to respectable levels," said Tom Albanese, chief executive officer.

Revenue was lower on account of lower crude oil and copper prices, lower volumes at Cairn India, partially offset by ramp-ups in volume from the power business. Higher operating performance and commodity prices enabled Ebitda (earnings before interest, taxes, depreciation and amortisation) at Rs 4,640 crore, higher by 31 per cent over the June quarter.

While free cash flow of Rs 2,613 crore, net debt reduced by Rs 2,259 crore. The company announced an interim dividend of Rs 1.75 per share.

“We have made significant operational progress, with an increase in production from Hindustan Zinc (HZL) quarter-on- quarter, good operating performance at our oil and gas business, the TSPL Power (the unit is in Punjab) business now fully operational and aluminium continuing to ramp-up," said Albanese.

Adding: “We have substantially reduced our debt and remain focused on strengthening our balance sheet, including by refinancing of debt maturities. Simplifying the group structure continues to be a priority, and the Cairn India-Vedanta merger remains on track for completion in the first quarter of calendar year 2017, supported by the shareholders of both companies."

Finance cost during the quarter was Rs 1,450 crore, higher by Rs 57 crore over the earlier quarter due to capitalisation of new capacities at the aluminium and power businesses, and an increase in the proportion of rupee borrowings, partly offset by reducing interest rates on these.

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The increase in finance costs due to capitalisation at the aluminium and power businesses was offset by capitalisation of interest pertaining to aluminium capacities under ramp-up at the Jharsuguda-II smelter.

Other income at Rs 1,252 crore was higher by Rs 137 crore sequentially, due to mark-to-market gains (revaluing on current prices) on investments. However, other income was lower by Rs 84 crore over a year, due to a lower investment corpus on account of the special dividend paid by HZL.

Gross debt marginally fell by Rs 275 crore during the quarter to Rs 66,794 crore. Net debt reduced by Rs 2,259 crore to Rs 11,961 crore. Of the total debt, the rupee/dollar split is 78:22. Further, the gross debt has long-term loans of Rs 61,537 crore and short-term borrowing of Rs 5,257 crore.

On the merger of Vedanta and Cairn India (its subsidiary), the company said the scheme was now subject to approval of the jurisdictional high courts and other regulatory authorities. On July 22, the two entities had formally revised the terms of the proposed merger. Under which, the public shareholders of Cairn India will receive, for each equity share held, one equity share in Vedanta and four redeemable preference shares (of 7.5 per cent) in Vedanta of a face value of Rs 10 each.

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