Vedanta Resources’ annual loss narrows to $3.5 billion
The mining giant led by billionaire Anil Agrawal had posted net loss of $3.8 billion in 2014-15, it said in a regulatory filing. However its attributable net loss rose marginally to $1.83 billion in 2015-16 against $1.79 billion in the previous financial year.
The London-listed firm’s revenues declined by 17 per cent to $10.74 billion in the last fiscal from $12.88 billion in 2014-15 on account of an “exceptionally challenging commodities markets” globally.
The company’s Chairman Anil Agrawal said: “Vedanta demonstrated resilience this year, delivering healthy EBITDA margin, strong free cash flow and lower gross and net debt in a volatile commodities market.” The company had record production in zinc, lead, silver at Zinc India, Aluminium, Power and Copper cathodes, he added.
Vedanta Resources CEO Tom Albanese said: “In FY2016, Vedanta demonstrated resilience in the face of exceptionally challenging commodities markets around the world.
“In my 40 years in the mining business I have seen the commodity cycle turn many times, although the severity of this torrid year was something no one foresaw.” The firm said a strong free cash flow of $1.7 billion enabled it to reduce net debt by $1.1 billion and gross debt by $0.4 billion. Vedanta Resources declared a final dividend of 30 US cents per share. A year ago with Vedanta had announced an ambitious goal of delivering savings of $1.3 billion over the next four years.
Through a combination of new business programmes, operational excellence, modernisation of the supply chain and innovative ideas it saved USS 325 million in the first year.
Albanese said Vedanta resources’ current requirements are low with FY 2017 capex expected to be around $1 billion, 50 per cent of which would be across the high return zinc projects at Gamsberg and Zinc India. Going ahead, Agrawal said: “Naturally, we now hope for an improvement in the dynamics of the global commodity markets. Indeed, we are cautiously optimistic for 2017; based on the visibility we have now, we believe a recovery may be emerging, led by zinc.”
Meanwhile, in a country where GDP may double in the decade ahead, Vedanta looks forward to playing its part in unlocking India’s wealth of world-class energy and mineral resources, he added.
On India, Agrawal said: “We see encouraging signs. Oil cess, a tax on production of crude oil has effectively been lowered at current price levels and export duty on low grade iron ore has been removed completely.” The government has encouraged increased mining activity, by commencing auctioning of coal and other mineral blocks, he added.
Vedanta’s iron ore operations in Goa resumed production and the firm has gained approvals to use power generated from 3 units of the Jharsuguda power plant for captive use and received environmental clearance for expansion of Lanjigarh alumina refinery capacity to 4 MTPS, he added.
“All are important steps towards increasing our capacity from our well-invested assets,” Agrawal noted. The firm said it has a target to deliver savings of $350-400 million in 2016-17 and is on track to deliver $1.3 billion by 2018-19.