Anil Agarwal-led Vedanta Limited on Thursday reported a consolidated pre-tax profit of Rs 1,122 crore for the September quarter, down 57 per cent from the same period last year, as lower revenues and a one-time impairment charge hit the company’s performance.
In the period under review, the company’s top line stood at Rs 21,739 crore, down 3 per cent from last year on the back of weak commodity prices, said the company in a press release.
A net exceptional loss due to one-time impairment charge stood at Rs 422 crore, further hurting the company’s profit before tax.
The exceptional item, primarily a charge of Rs 504 crore relating to impairment at Avanstrate Inc, partially offset by accrual of Interest against pending claims at TSPL (TSPL Sterlite Energy) based on Supreme Court order giving a net charge of Rs 422 crore, said the company.
However, Vedanta’s consolidated net profit in the September quarter stood at Rs 2,730 crore, up 44 per cent from last year as one-time deferred tax benefit of Rs 1,891 crore lent firm support.
“We are at an exciting transition that will see the company accelerate in the expansion of its reserves and resource base over coming quarters. This expansion is being delivered through strict capital allocation and balance sheet focus aimed at creating value for our stakeholders,” the release quoted Srinivasan Venkatakrishnan, chief executive officer as saying.
Vedanta Limited emerged as the highest bidder for the Jamkhani coal block in Sundargarh district, Odisha, in the 10th tranche of the captive coal block auction conducted by Ministry of Coal, Government of India. The coal block is in proximity to the company’s Jharsuguda aluminium smelter.
The Jamkhani coal block is one of the most attractive coal blocks for the company’s Jharsuguda plant in terms of location, annual capacity, reserves and readiness to produce, said the company.
The approved per annum capacity of the mine is 2.6 million tonne. It has an extractable reserve of 114 million tonne. Once operational, it will provide fuel security, improve power availability and further strengthen the company’s aluminium operations and performance.
The company’s aluminium loss has widened in the quarter gone by mainly due to lower global aluminium prices and coal shortage even as cost of production had lowered on year-on-year basis.
Meanwhile, as per Bloomberg estimates, the company’s net sales was seen at Rs 19,799 crore in the quarter gone by, while the bottomline was expected to be at Rs 680 crore.
The company’s consolidated EBITDA (earnings before interest, taxes, depreciation and ammortisation) declined 15 per cent on year-on-year basis to Rs 4,497 crore in the September quarter.
Vedanta's gross debt reduced by Rs 3,279 crore bringing the net Debt/EBITDA at 0.9x, lowest among Indian peers, said the company. Net Debt reduced by Rs 8,322 crore in Q2 FY 2020. As on September 30, the company's total cash and liquid investments stands at Rs 35,817 crore.
With regard to business wise performance, at Hindustan Zinc, ore production was up by 3 per cent year-on-year at 3.6 million tonne with strong growth at Rampura Agucha and Zawar Mines. Mined metal production stood at 219,000 tonne, up 3 per cent sequentially. Entering H2, with last phase of expansion project completed enabling 1.2 mtpa capacity, said the company.
In oil & gas, the company said 166 wells were drilled and early gas production facility currently ramped up to over 50 mmscfd.Iron ore saw highest quarterly sales in Karnataka at 1.4 million tonne. Meanwhile, steel sales at 283,000 tonne, up 6 per cent year-on-year.
Noting the bleak demand scenario, the management cut its capex guidance for FY20 to Rs 8,500 crore from Rs 10,000 crore earlier. “We have already spent Rs 3,000 crore in the first half of the year and will utilize the balance in the remaining part of the year,” informed the management.
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