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New Delhi : Mining conglomerate Vedanta Ltd on Friday reported more than halving its second-quarter net profit as it faced twin winds of falling commodity prices and rising energy costs while the government slapped an impressive profit margin on oil.
Consolidated net profit was at 2,690 crore, or 4.88 rupees per share, in July-September compared with 5,812 rupees, or 12.46 rupees per share, profit in the same period a year ago, the company said in a statement.
The profit declined due to the unique scenario of input commodity inflation and lower output commodity prices as well as high energy costs, said company CEO Sunil Duggal.
In addition, the government took away gains made from higher oil prices by levying a profit tax. The company paid Rs 519 crore on the tax which was introduced on July 1.
Duggal said the situation has improved in the current quarter with moderation in inflation and adequate coal supplies.
Revenue grew 21 percent to Rs 36,237 crore.
The company achieved a consolidated EBITDA of Rs 8,038 crore with an EBITDA margin of 25 percent, the best in the industry.
Gross debt decreased by Rs 2,543 crore to Rs 58,597 crore. The company had Rs 26,453 crore in cash at the end of September.
Operationally, Vedanta completed the expansion of the Jharsuguda aluminum plant to 2.4 million tonnes.
Aluminum production rose 2 percent as it mined the highest zinc. But oil production declined to 1,40,471 barrels of oil equivalent per day from 1,65,000 boepd last year.
“We generated strong free cash flow (before capital) of Rs 8,369 crore supported by robust operational and financial performance,” Duggal said. “Our growth and vertical integration projects, aimed at reducing market volatility impact and creating shareholder value, are progressing well. We remain well positioned, with a rich diversified asset base, strong balance sheet and cost optimization levers, to withstand a challenging macroeconomic environment. .”
Vedanta said its board has approved spending over Rs 8,600 crore on expansion at its subsidiary Bharat Aluminum Company Ltd (Balco).
While rolled production capacity will be expanded at a revised cost of Rs 595 crore, molding capacity would be raised at a cost of Rs 8,094 crore.
Vedanta Ltd, an arm of Vedanta Resources, is one of the world’s leading oil and gas and metals companies with operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, aluminum and power across India, South Africa and Namibia.
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