Thursday May 15, 09:21 AM
Vedanta FY EBITDA rises to record $3.01 bln, beating expectations UPDATE
(Adds comments from conference call)
LONDON (Thomson Financial) - Vedanta Resources Plc (LSE: VED.L - news) . reported an 11 percent rise in full-year EBITDA, beating market expectations, boosted by higher production from its key divisions and the contribution from its new iron ore business.
EBITDA rose to a record $3.01 billion, from $2.70 billion last year, exceeding the $2.81 billion consensus of 10 analysts. Sales grew 26 percent to a record $8.2 billion.
However, EBITDA from its non-iron ore businesses was lower by $278.2 million, mainly due to the 11 percent appreciation of the Indian rupee against the U.S. dollar, lower zinc prices and lower tolling and refining charge (TC/RC) realisations. It also had a $134.2 million hedging loss but said it has no strategic hedges in the current year.
On a conference call, chief executive Kuldip Kaura said he expects a significant increase in production growth across all metals in the current year and anticipates costs declining even amid industry wide inflationary pressures.
'The next year financial year will be a step change in production as we move towards out 1 million tonne target,' he said. Almost all of the company's projects are on track to meet that target, he added.
The company has a $8.8 billion investment programme to increase capacity in its base metals to 1 million tonnes per year.
The group, which has $6.0 billion of near-term organic growth projects under implementation, said it continues to evaluate additional organic growth opportunities.
'The abundance of bauxite and coal in India, combined with our proven track record in project delivery, presents an exciting growth opportunity,' said chairman Anil Agarwal.
Kaura reiterated that the company will continue to look at organic growth but added that in areas such as copper, the group needs to integrate more.
'If there are opportunities that are good, we will certainly look at them,' he said.
The company spent about $2.57 billion on projects during the year and anticipates spending a similar amount in the current year.
Operating costs in the year to end March were lower in all businesses except Zambian copper, despite ongoing cost pressures across the mining sector.
Attributable profit fell 5.9 percent to $879.0 million, slightly better than the $874 million consensus, on higher depreciation charges and a smaller profit attributable from minority stakes such as Sterlite following its ADR in the United States.
Last month, the group said iron ore output rose 17 percent, aluminium production grew 12.8 percent and refined zinc output jumped by 22.4 percent.
However, full-year alumina output from Korba/Mettur was 2.7 percent lower and mined copper from Zambia was down 9.5 percent at 76,000 tonnes following a power grid failure in January.
Vedanta said it anticipates a positive resolution soon regarding the acquisition of the Indian government's stakes in BALCO and Hindustan Zinc. It is also hopeful of a positive early resolution concerning environmental clearances for the bauxite mines at the Lanjigarh alumina refinery.
The company said it plans to pay a final dividend of 25 cents, taking its full-year dividend to 41.5 cents.
'These excellent results represent the fifth year of dynamic growth across all of our businesses,' Agarwal said. 'Global demand for metals continues to be strong and we are well placed to serve this growing demand.'
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