Vedanta Ltd undaunted by commodity price volatility
31 July 2015 2:44 AM IST
The Anil Agarwal-led mining conglomerate had clocked a net profit of Rs 1,341.23 crore a year ago. The firm, part of the London Stock Exchange-listed Vedanta Resources, saw its net sales fell marginally to Rs 16,951.88 crore in April-June of 2015-16, from Rs 17,055.5 crore in the same quarter of 2014-15. Its total expenses rose to Rs 14,742.34 crore from the earlier Rs 13,599.20 crore.
On the quarterly show, Vedanta Ltd CEO Tom Albanese said: “It was quite a challenging period for the natural resources sector and this is expected to be for some time. We have been controlling costs and capital expenditure.”
Albanese, however, said the firm is beginning to see some tightness in supply of minerals, notably zinc, indicating that such a scenario will lead to prices hardening.
Going ahead, he said: “For the balance of the next quarter, I’m looking forward to those actions that we or the government can take and we can actually bring our business into full potential. Notably, this would include getting the iron ore production going from Goa and our aluminium businesses.
“This would include getting requisite approvals, so we can expand our facility at Lanjigarh (Odisha) for refining and be able to use our own power generation to ramp up facilities for aluminium smelters in Jharsuguda through CPP conversion.” Both iron ore and aluminium markets are in a “very difficult share right now”, so the firm needs to ensure that those businesses can remain compatible and sustainable, he added.
The firm, earlier known as Sesa Sterlite, said attributable PAT was 35 per cent lower at Rs 866 crore in the quarter under review due to a lower EBITDA partially offset by lesser finance costs, forex gains and a subdued depreciation and amortisation. Exceptional items of Rs 2,128 crore (gross of tax) for Q1 of 2014-15 <g data-gr-id="49">pertain</g> to change in the method of depreciation at Cairn India for the period up to March 31, 2014, it said.
“In Q1, we saw continued volatility in commodity prices, but zinc has held up quite well in view of its strong fundamentals and is now the largest contributor to our EBITDA,” Albanese said. “We continue to focus on improving efficiency, costs, and enhancing production across our well-invested asset base. We remain on track to restart iron ore production in Goa following the monsoon.”
The company’s gross debt increased Rs 1,778 crore to Rs 79,530 crore on account of funding project payments and temporary working capital requirements. “Debt levels are expected to reduce as working capital is repaid in Q2 of 2015-16,” the statement said.
The stock on Wednesday closed at Rs 130.60 on the BSE, up 1.67 <g data-gr-id="34">per cent</g>. Vedanta
said its cash and cash equivalents stood at Rs 47,000 crore for the June quarter.
May take tough moves on aluminium jobs
Terming the market situation for domestic aluminium producers as “very challenging”, Vedanta on Wednesday said the firm might be forced to take “some difficult decisions” on jobs to cut costs. “It is a very challenging market situation for aluminium producers in India. We are taking all measures to keep our aluminium business steady and reduce costs. This may result in us taking some difficult decisions,” Vedanta CEO Tom Albanese said when asked whether the company will cut jobs in its aluminium business.
Iron ore mining to resume by October: Goa CM
Goa Chief Minister Laxmikant Parsekar on Wednesday informed the Legislative Assembly that iron ore extraction activity in the state would resume by October this year. The mining activity in the state has been stopped since September 2012 following <g data-gr-id="99">largescale</g> allegations of illegalities in this sector. “The State Government has lifted the temporary ban on Iron and Manganese Ore mining in the State on January 15, 2015. Since all assistance is given by the state government, mining might resume from <g data-gr-id="109">October,</g> 2015,” Parsekar said.
He was responding to a question of Leader of Opposition Pratapsingh Rane. He further said the requisite renewal orders in case of 89 mining leases are already granted. The mining activity in the state was suspended by the Goa government, pending <g data-gr-id="106">inquiry</g> into the illegal mining activity. State based NGO Goa Foundation had approached the Supreme Court based on the findings of Justice M B Shah commission which had pegged the illegalities to the tune of Rs 35,000 crore.
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