Vedanta Resources core profits up 21% courtesy Cairn India

Vedanta Resources today reported a 21 per cent increase in its core profits at USD 4.888 billion

Written by Reuters | London/new Delhi | Published: May 16, 2013 2:07:16 pm

Buoyed by earnings from subsidiary Cairn India and higher metals production,Vedanta Resources today reported a 21 per cent increase in its core profits at USD 4.888 billion for the year ended March,2013.

The natural resources giant,whose most of the operations are in India,had reported USD 4.026 billion core profit or EBITDA (earnings before interest,taxes,depreciation and amortisation) in 2011-12.

Its revenues rose by 7 per cent to USD 14.989 billion in the last fiscal vis-a-vis USD 14.005 billion of FY’12,it said in a statement.

Net profit attributable to equity shareholders rose to USD 157.4 million from USD 59.8 million,a jump of 163 per cent due to changes in profit mix and profits earned for its stake in Cairn India.

“Improved attributable profit from Cairn India’s first full year of operation,lower losses in Vedanta Aluminium Ltd improved the attributable profit of the Company. However,this was impacted by lower profits from our Iron Ore business,Copper Zambia and higher interest at Group level,” the company said.

During the year,company’s subsidiary Cairn India reported 18.8 per cent increase in its daily oil production at 2,05,323 barrels.

The earnings from Cairn,whose acquisition was completed in December,2011 also negated the impact of almost zero iron ore production from another group firm Sesa Goa,whose production was affected due to mining bans in Goa and Karnataka.

“Despite industry-wide inflationary pressures,we have reduced or maintained unit costs across majority of our operations.

“Whilst we are not immune to cost inflationary pressures,we continued to control costs and have demonstrated a track record of implementing operational improvements and maintaining our relatively new asset base at low sustaining capex costs,” Vedanta chairman Anil Agarwal said.

Moreover,the company managed to reduce its net debt by USD 1.5 billion in the last fiscal to USD 8.615 billion. In FY’12,the company’s net debt was USD 10.064 billion.

“Most of our growth projects are now complete so we have passed the inflexion point where free cash flow exceeds our growth capital expenditure. We are now focused on deleveraging and reducing debt,” the company said.

Meanwhile,the company also announced appointment of Deepak Parekh,Non-Executive Chairman of HDFC,as its independent non-executive Director on its Board with effect from 1 June 2013.

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