Millennium Post

Vedanta profit up 21%; Cairn India contributes 49% of it

Vedanta profit up 21%; Cairn India contributes 49% of it
Vedanta Resources on Thursday reported a 21 per cent growth in its core profits (earnings before interest, taxes, depreciation and amortisation) to $ 4.888 billion for the year ended March, 2013, 49 per cent of which was contributed by Cairn India alone. The natural resources giant had reported $4.026 billion core profit or EBITDA  in 2011-12.

Vedanta had acquired oil major Cairn India in December, 2011, and last fiscal was the first year, in which Cairn's full earnings and profits got reflected in Vedanta's financials. Cairn's EBITDA stood at $2.44 billion during the last fiscal and it reported 18.8 per cent increase in its average daily oil production at 2,05,323 barrels.

'In 2012 Cairn India contributed 49 per cent of the Groups EBITDA. This diversification has helped the group improve the profitability despite adverse commodity prices in copper, aluminium, zinc, lead and silver,' Vedanta, whose most of the operations are in India, said in a statement.

Moreover, its net profit attributable to shareholders rose to $157.4 million from $59.8 million, a jump of 163 per cent due to changes in profit mix and profits earned for its stake in Cairn India. Besides, its revenues rose by 7 per cent to $14.989 billion in the last fiscal vis-a-vis $14.005 billion in financial year 2011-12. However, the continuation of the mining ban in Goa and Karnataka in the last fiscal impacted Vedanta's iron ore business (run through subsidiary Sesa Goa) significantly during the year. According to the company, it contributed a negative variance of $495.2 million to operating profits.

Moreover, Vedanta's operating profit for the year was also impacted negatively by $518.9 million due to lower prices of aluminium, zinc and copper, the company said. 'Despite industry-wide inflationary pressures, we have reduced or maintained unit costs across majority of our operations,' Vedanta chairman Anil Agarwal said on company's performance.

Speaking on the proposed merger of Sesa Goa and Sterlite Industries, he said during a conference call that it could take another two-three months' time as approval from the Madras High Court is still awaited. The Bombay High Court's Goa bench has already approved the merger, announced in February, 2011.

'It (the merger) is a very democratic process. We have no doubt that this is going to happen... It is a win-win for everybody but the timeline can take another two-three months,' Agrawal said. During the last fiscal, Vedanta managed to reduce its net debt by $1.5 billion in the last fiscal to $8.615 billion. Its gross debt stood at $16.592 billion.
PTI

PTI

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