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Vedanta’s profit falls 75% on lower zinc and copper prices

Vedanta’s profit falls 75% on lower zinc and copper prices
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First Published: Thu, May 07 2009. 09 18 PM IST
Updated: Thu, May 07 2009. 09 18 PM IST
London: The largest copper producer in India, Vedanta Resources Plc., posted a 75% drop in full-year profit after metals prices declined.
Net income fell to $219.4 million (Rs1,086 crore) in the year ended March, from $879 million a year earlier, London-based Vedanta said in a Regulatory News Service statement on Thursday.
That missed the $298.6 million median estimate from a survey of five analysts compiled by Bloomberg. Sales slid 20% to $6.59 billion.
“The current economic environment has resulted in depressed commodity prices and an uncertain demand outlook for our industry,” chairman Anil Agarwal said in the statement. Vedanta will focus on cutting output costs this year, he said.
Vedanta is expanding in North America and agreed in February to buy bankrupt copper miner Asarco Llc. for $1.7 billion, its first output in the continent.
It said last week a unit controlled 9.5% of Canadian zinc and copper maker HudBay Minerals Inc. Vedanta plans to be the world’s fifth largest aluminium producer.
The company is proposing a 25 cents-a-share final dividend, bringing the full-year payout to 41.5 cents a share, unchanged from last year. It had $4.9 billion of cash and liquid investments at the year-end.
Vedanta shares gained 3.58% to 1,274 pence at 14.36 GMT on Thursday on the London Stock Exchange.
The stock has doubled in value this year, after declining 70% in 2008.
Zinc, which accounted for 51% of Vedanta’s operating income in the previous fiscal year, averaged $1,194.57 a tonne on the London Metal Exchange during the company’s fiscal second half, down from $2,551.31 a year earlier.
Full year output of refined zinc climbed 29% to 552,000 tonnes, Vedanta said last month. Production of finished copper plates, called cathodes, fell 8.8% to 446,000 tonnes.
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First Published: Thu, May 07 2009. 09 18 PM IST
More Topics: Vedanta | Profit | Zinc | Copper | Price |