BackVedanta posts 46% fall net profit on one-time reversal in impairment gain
Shutdown of the copper smelter at Thoothukudi weighed on its revenue, shrinking 15% year-on-year to ₹23,092 crore in Q4For FY20, Vedanta’s management outlined a capital expenditure plan of $1.4 billion
PremiumMUMBAI : Mining and metals giant Vedanta Ltd reported a net profit of ₹2615 crore, down 46% from ₹4802 crore in the year-ago period. While the March quarter's performance was better than expected driven by higher volumes in sales of metals and better cost management, the net profit was lower because of a one-time reversal in impairment gain, it had recorded last year.
However, the shutdown of the copper smelter at Thoothukudi weighed on its revenue, shrinking 15% year-on-year to ₹23,092 crore in the March quarter from ₹27,311 crore in the same period a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at ₹6,330 crore for the quarter, lower by 19% from the March 2018 quarter which had reported ₹7,767 crore. The company’s EBITDA was affected by lower commodity prices, rupee appreciation, and lower volumes at Zinc India.
For the full year, net profit after exceptional items stood at ₹7,065 crore for the full fiscal year 2019, falling 32% year-on-year from ₹10,342 crore in FY18 while revenue for the same period reduced by 1% to ₹90,901 crore in FY19 from ₹92,011 crore.
For FY20, Vedanta’s management outlined a capital expenditure plan of $1.4 billion.
Gross debt was at ₹66,225 crore on 31 March 2019, an increase of ₹8,066 crore year-on-year. This was mainly due to the acquisition of Electrosteel Steels Ltd and temporary borrowing at Zinc India. Net debt was at ₹26,956 crore, higher by ₹4,998 crore year-on-year.
In operations, for the year, Vedanta achieved record mined metal production, with zinc from underground mines growing 29%, lead up 18% and silver up 22%. With silver, the company produced 700 tonnes during the year, placing it among the top 10 silver producers in the world, the company said. In oil and gas, the average gross production of 189,000 barrels of oil equivalent per day for FY19, up 2% year-on-year. Aluminium production rose to the highest ever at 2 million tonnes (mt), up 17% year-on-year. Iron ore production of saleable ore at Karnataka stood at 4.1mt, up 89% y-o-y while operations in Goa are still shuttered by a state-wide ban. With the acquisition of Electrosteel Steels Ltd last year, steel production stood at 1.2mt, with an exit production run-rate of 1.5mtpa. The company targets to double capacity at the plant to 3mt in the coming year.
Srinivasan Venkatakrishnan, CEO, Vedanta, said: “New production records were set this year, a new Zinc mine with huge potential being commissioned, efficiencies to mitigate cost pressures, growth projects being on track and increasing our mineral and oil resources. Looking ahead, FY2020 will be an exciting year of growth in our key businesses – Zinc-Lead-Silver, Oil & Gas and Aluminium, being pursued with a strict capital allocation framework."
Sterlite Copper, a unit of billionaire Anil Agarwal’s Vedanta group runs a 400,000 tonne-capacity copper plant in Thoothukudi. The company’s plans to expand capacity at the plant attracted criticism in May when local protests broke out against the plant’s alleged pollution of local water and land resources. Eleven protestors were shot and killed by the police. On 28 May, the Tamil Nadu government ordered the plant be closed permanently. The shutdown is being contested in court. Venkatakrishnan said in a call with journalists that Vedanta is optimistic that the smelter will be reopened during FY20.
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