Vedanta consolidated net slips 30.4% to Rs 615 crore in first quarter
READ MORE ON » Vedanta Resources | Tom Albanese | Iron ore | Cairn India | Balance Sheet | Anglo American
KOLKATA: Vedanta Ltd has said it expects improved margins in its oil and gas business to offset price volatility in metals business over the next couple of quarters, even as group CEO Tom Albanese refused to respond to Friday's reports that global resources giant Anglo American had declined a merger proposal from the Vedanta group.
"We could see a sideways motion in metals with prices higher than the previous period. We have had good EBIDTA margins of over 30 per cent in the first quarter. With recovery in oil prices and re-engineering in Cairn we hope to revive some projects that were taken off the plate," Albanese said.
Vedanta EBIDTA was Rs 3,543 crore, with a margin of 32 per cent, mainly due to cost savings and a ramp up in aluminium and iron ore volumes.
"Our basket (of commodities) have been buffering each other," said Albanese, adding that a diversified resource company offers better returns to shareholders than a single commodity company.
"For the first time in five years, we expect calendar 2016 to end at a level higher than its beginning. For instance, aluminium prices have gone up to $4,900 per tonne against $4,000 earlier."
Vedanta posted a 30.4 per cent drop in consolidated net profit to Rs 615 crore in the June quarter against a net profit of Rs 884 crore in the year-ago period, due to lower volume of mined metal. Income from operations slid 15 per cent to Rs 14,364 crore, against a turnover of Rs 16,943.71 crore in the same period last year.
Fall in revenues was due to slipping oil and metal prices, a weaker power market and lower zinc volumes, partially offset by ramp-up in volumes for iron ore, power and aluminium, according to Vedanta.
Total consolidated income declined by 15 per cent to Rs 14,437.08 crore (Rs 17,008.81 crore). Vedanta scrip closed 2.69 per cent lower at Rs 164.60 on the BSE on Friday.
"We have made good progress on the ramp-up of capacities at aluminium, power and iron ore businesses during the quarter. These would be significant contributors to earnings as the year progresses," said Albanese.
He said commissioning of pots at Balco-II and the first line at Jharsuguda-II smelter have been nearing completion and ramp up in the second line has commenced.
In Goa, Vedanta production is at 40 per cent of environment clearance capacity for the quarter. In zinc business, silver production went up 20 per cent, while mined metal production is poised to get substantially higher in the second half of the year.
"Simplification of the group structure is also on track following the recent announcement of revised and final terms for the Vedanta Ltd and Cairn India merger," said Albanese.
"We could see a sideways motion in metals with prices higher than the previous period. We have had good EBIDTA margins of over 30 per cent in the first quarter. With recovery in oil prices and re-engineering in Cairn we hope to revive some projects that were taken off the plate," Albanese said.
Vedanta EBIDTA was Rs 3,543 crore, with a margin of 32 per cent, mainly due to cost savings and a ramp up in aluminium and iron ore volumes.
"Our basket (of commodities) have been buffering each other," said Albanese, adding that a diversified resource company offers better returns to shareholders than a single commodity company.
"For the first time in five years, we expect calendar 2016 to end at a level higher than its beginning. For instance, aluminium prices have gone up to $4,900 per tonne against $4,000 earlier."
Vedanta posted a 30.4 per cent drop in consolidated net profit to Rs 615 crore in the June quarter against a net profit of Rs 884 crore in the year-ago period, due to lower volume of mined metal. Income from operations slid 15 per cent to Rs 14,364 crore, against a turnover of Rs 16,943.71 crore in the same period last year.
Fall in revenues was due to slipping oil and metal prices, a weaker power market and lower zinc volumes, partially offset by ramp-up in volumes for iron ore, power and aluminium, according to Vedanta.
Total consolidated income declined by 15 per cent to Rs 14,437.08 crore (Rs 17,008.81 crore). Vedanta scrip closed 2.69 per cent lower at Rs 164.60 on the BSE on Friday.
"We have made good progress on the ramp-up of capacities at aluminium, power and iron ore businesses during the quarter. These would be significant contributors to earnings as the year progresses," said Albanese.
He said commissioning of pots at Balco-II and the first line at Jharsuguda-II smelter have been nearing completion and ramp up in the second line has commenced.
In Goa, Vedanta production is at 40 per cent of environment clearance capacity for the quarter. In zinc business, silver production went up 20 per cent, while mined metal production is poised to get substantially higher in the second half of the year.
"Simplification of the group structure is also on track following the recent announcement of revised and final terms for the Vedanta Ltd and Cairn India merger," said Albanese.
Help us understand your experience with economictimes.com. Share your feedback here.