Vedanta pre-tax profit slips 57%
Lower revenue and one-time impairment charge hit quarter’s performance
Metals and mining conglomerate Vedanta reported a consolidated pre-tax profit of ~1,122 crore for its Indian arm in the September quarter, down 57 per cent from the same period last year as lower revenues and a one-time impairment charge hit performance.
Revenue was ~21,739 crore, down three per cent from a year before, on the back of weak commodity prices, said the company. A net exceptional loss due to the one-time impairment charge stood at ~422 crore.
The exceptional item was a charge of ~504 crore relating to impairment at Avan strate, partially offset by accrual of interest against pending claims at TSPL Sterlite Energy, based on a Supreme Court order, giving a net charge of ~422 crore, said the company.
However, consolidated profit in the quarter was ~2,730 crore, up 44 per cent from last year, from a one-time deferred tax benefit of ~1,891 crore.
“We are at an exciting transition that will see the company accelerate in the expansion of its reserves and resource base over the coming quarters. This expansion is being delivered through strict capital allocation and balance sheet focus aimed at creating value for our stakeholders,” went a company statement from Srinivasan Venkatakrishnan, chief executive officer.
Vedanta was the highest bidder for the Jamkhani coal block in Sundargarh district of Odisha, in the 10th tranche of the captive block auction conducted by the Union ministry. The block is in proximity to the company’s Jharsuguda aluminium smelter. Jamkhani is one of the most attractive coal blocks for the smelter in terms of location, annual capacity, reserves and readiness to produce, said the company.
The approved annual capacity of the mine is 2.6 million tonnes (mt), with estimated extractable reserve of 114 mt. Once operational, it will provide fuel security, improve power availability and strengthen the aluminium business, said Vedanta. The company’s aluminium loss widened in the quarter, mainly due to lower global prices and coal shortage, even as the cost of production fell, yearon-year. The company’s consolidated Ebitda (earnings before interest, taxes, depreciation and amortisation) declined 15 per cent from the period last year to ~4,497 crore. Gross debt reduced by ~3,279 crore, bringing the ratio of net debt to Ebitda down to 0.9, lowest among Indian peers, said Vedanta. Net debt reduced by ~8,322 crore in the quarter. As on September 30, the total of cash and liquid investments was ~35,817 crore.
With regard to business-wise performance, ore output at Hindustan Zinc rose 3 per cent year-on-year to 3.6 mt, with strong growth at the Rampura Agucha and Zawar mines. Mined metal production was 219,000 tonnes, up 3 per cent from the June quarter. The final phase of expansion here was completed, enabling 1.2 mt annual capacity, said the firm.
GROSS DEBT REDUCED BY ~3,279 CRORE, BRINGING THE RATIO OF NET DEBT TO EBITDA DOWN TO 0.9, LOWEST AMONG INDIAN PEERS, SAID VEDANTA