Vedanta Q1 profit tanks 30%; revenue, EBITDA miss estimates

Vedanta 's first quarter (April-June) profit fell 30.4 percent year-on-year to Rs 615 crore, impacted by oil and metal businesses. Revenue during the quarter slipped 15 percent to Rs 14,437 crore on yearly basis due to fall in oil and metal prices, weaker power market and lower

zinc volumes, which partially offset by ramp up in volumes at iron ore, power and aluminium, the flagship company of Anil Agarwal-owned London-listed Vedanta Resources Plc said. Zinc India was impacted by lower mined metal production as per the mine plan, and the second half is expected to be substantially higher, Tom Albanese, CEO said. He further said the company has made good progress on the ramp up of capacities at aluminium, power and iron ore businesses during the quarter, which would be significant contributors to earnings as the year progresses. Bottomline and operating profit margin beat analysts' estimates but topline and operating profit numbers were a miss. Profit was estimated at Rs 500 crore on revenue of Rs 16,500 crore and operating profit at Rs 3,700 crore with margin of 22 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) slipped 15.8 percent to Rs 3,439.6 crore YoY, hit by lower commodity prices. Margin contracted by 23 basis points to 23.8 percent in same period. The beat in margin was a result of strong cost saving initiatives and volume ramp-up at aluminium & iron ore. Power and fuel charges for the quarter declined 20 percent to Rs 2,206.8 crore. Other income increased 14.5 percent to Rs 1,093.5 crore compared with year-ago period due to higher mark to market gain on investments in current quarter partially offset by lower investment corpus on account of pay out of special dividend at the beginning of the quarter at Zinc India, the company said.

Gross debt reduced by Rs 606 crore during the quarter to Rs 76,953 crore given repayment of inter-company loan of Rs 5,736 crore to Vedanta Resources Plc, partially offset by borrowings at Zinc India and Aluminium businesses. Net debt increased by Rs 6,400 crore to 24,654 crore mainly on pay out of special dividend at Zinc India during the current quarter, Vedanta said. Meanwhile, recently the boards of Vedanta and Cairn India approved revised and final terms for the merger of the latter with the former. Pursuant to the revised and final terms, each Cairn India minority shareholder will receive for each equity share held, one equity share in Vedanta and four redeemable preference shares with a face value of Rs 10 in Vedanta. Vedanta holds 59 percent stake in Cairn India and 65 percent in Hindustan Zinc. The stock closed at Rs 164.60, down 2.69 percent on the BSE.