Anil Agarwal-led Vedanta Limited reported a 21% dip in its December quarter net profit to ₹1,574 crore as revenue and EBITDA fell due to shutdown of copper smelter at Tuticorin and lower commodity prices.
Vedanta’s revenue fell 3% to ₹23,669 crore and EBITDA dipped 11% to ₹5,953 crore during the quarter.
Company’s EBITDA margin contracted by 17% to 29% during the quarter on account of lower commodity prices and input commodity inflation.
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The company’s copper production declined 77% to 23,000 tonnes after its smelter was ordered shut by the Tamil Nadu government.
Depreciation during the quarter increased 34% to ₹2,207 crore on account of higher charge due to higher ore production at Zinc India and Zinc International, due to capitalisation of projects at oil and gas and aluminium business and due to acquisition of new businesses.
Even finance costs during the quarter increased 21% ₹1,358 crore due to higher gross borrowings, increase in interest rates in line with the market partially offset by higher capitalisation during the period.
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Commenting on the results, Mr. Srinivasan Venkatakrishnan, CEO, Vedanta Resources, said, “We achieved record zinc and lead volumes and silver production at Hindustan Zinc, and had the highest-ever alumina production. We saw structural reductions in aluminium costs with increasing raw material linkages. The steel business achieved strong margins and recent developments in our copper business are directionally positive. Our profitability and gearing metrics were strong. Our growth projects and ramp up plans are all on track, to set the next quarter as a base for a strong next year.”
Mr. Srinivasan has been appointed as whole-time director and CEO of Vedanta Limited effective March 1, 2019. Mr. Srinivasan is the CEO and a member of the board of directors of Vedanta Resources Limited, the holding company, effective from August 31, 2018, said the company in a statement.
Vedanta’s net debt stood at ₹39,531 crore with cash and cash equivalents of ₹30,530 crore during the quarter. Vedanta’s EPS for the quarter before exceptional items was at ₹4.25 per share.
“Vedanta result is slightly above consensus estimates and the subdued result was very much on expected lines and is factored into the price. Going forward, with recent development of base metal prices inching higher because of better domestic demand, weak currency and improving international sentiment, we might see improved earning outlook in coming quarter,” Paras Bothra, president, equity research, Ashika Stock Broking, told The Hindu.
Vedanta shares on BSE closed up 1.78% at ₹197.5 in a firm Mumbai market on Thursday, valuing the company at ₹73,414.63 crore.