Vedanta Ltd basks in robust Q1 profit margin

Vedanta Limited (formerly known as Sesa Sterlite Ltd) today announced its unaudited consolidated results under Ind AS for the first quarter (Q1) ended 30 June 2016. The total Q1 revenues totalled at INR 14,364 crore, net profit amounted to INR 3,543 crore with strong margin of 32 per cent, and attributable net profit before exceptional items increased significantly from a loss of INR 62 crore in Q4 FY2016 to a profit of INR 615 crore.

Vedanta has attributed the 15 per cent year-on-year decline of revenues to the falling commodity prices, though it has been partially offset by the ramp ups in volumes of aluminium and other metals. The higher EBIDTA margin, the company says, was a result of strong cost saving initiatives and volume ramp-up at Aluminium and Iron Ore.

Cost saving initiatives of Vedanta Ltd. include clean-sheet based negotiations, optimizing sourcing mix in key raw materials, logistics, and consolidation of spend and contracts.

The mineral and metal conglomerate, after Q1 2016, is clearly in a robust financial position with total cash and cash equivalents of INR 52,299 crore.



The commissioning of pots at BALCO-II and 1st line of Jharsuguda-II smelter is nearing completion, the company updated in its Q1 financial report. The second line ramp-up has also commenced; the current exit production run-rate is 1.1 million tonnes per annum, the report said.

The Boards of Vedanta Limited and Cairn India have approved revised and final terms for the Transaction on 22nd July 2016, taking into account prevailing market conditions and having regard to underlying commercial factors.

Tom Albanese, Chief Executive Officer, Vedanta Limited, said: "We have made good progress on the ramp up of capacities at our Aluminium, Power and Iron Ore businesses during the quarter. These would be significant contributors to earnings as the year progresses. Zinc India was impacted by lower mined metal production as per the mine plan, and the second half is expected to be substantially higher. We are focused on generating stronger free cash flow and delevering the balance sheet, in line with our strategic priorities. Another of these priorities, the simplification of the group structure, is also on track following the recent announcement of the revised and final terms for the Vedanta Ltd and Cairn India merger."