Vedanta Q1 profit declines 12% to Rs 1,351 crore on low commodity prices; EBITDA down 20%

Anil Agarwal-led Vedanta on Friday reported 11.9 per cent year-on-year decline in consolidated profit after taxes (PAT) at Rs 1,351 crore for the quarter ended June 30, 2019, impacted by low commodity prices and uncertain market environment.

"The mining company had posted consolidated net profit at Rs 1,533 crore during the same quarter last year," Vedanta said in a filing to the Bombay Stock Exchange.

Vedanta's balance sheet showed that the consolidated revenue fell by 3.7 per cent to Rs 21,374 crore in Q1FY20 versus Rs 22,206 crore in Q1FY19, due to lower commodity prices partially offset by higher aluminium sales, volume addition from ESL, commencement of Gamsberg mine and currency depreciation.

The operating profit or EBITDA (earnings before interest, tax, depreciation and amortization) of the company declined 20 per cent YoY to Rs 24,012 crore, mainly due to due to market and regulatory factors. The operating margin slipped to 27 per cent in April-June quarter of 2019-20, versus 34 per cent in the year ago period.

Depreciation and amortisation increased by 20 per cent to Rs 2,155 crore, as against Rs 1,796 crore in the corresponding quarter last fiscal, the company said. "This was mainly due to higher ore production at zinc businesses, change in reserves estimates and asset capitalisation at Zinc India, commencement of Gamsberg operations, and increased charge at oil and gas due to capitalisation," Vedanta said in the regulatory filing.

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As of June 30, 2019, the Indian miner had a gross debt of Rs 59,517 crore as compared to Rs 6,708 crore on March 31, 2019, due to repayment of debt at Cairn India, Vedanta and temporary borrowings at Zinc India.

Net debt stood at Rs 28,743 crore, higher by Rs 1,787 crore as compared to March 31, 2019, "primarily due to working capital unwinding and regrouping of lease liability to borrowing due to Ind AS 116 implementation".

Commenting on earnings, Vedanta CEO Srinivasan Venkatakrishnan said, "We continue to strengthen our position as one of the largest diversified natural resource businesses in the world with our strategy focused on value-added growth. Our businesses stayed resilient in a quarter with low commodity prices and uncertain market environment and we continued to ramp up across the key verticals, zinc and oil & gas."

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"We look forward to exciting quarters ahead as we continue to deliver for all our stakeholders," he added.

Meanwhile, Vedanta share closed 4.26 per cent lower at Rs 164.05 apiece on the BSE ahead of its earnings announcement.

Edited by Chitranjan Kumar