Resources giant Vedanta Limited, formerly known as Sesa Sterlite Ltd, announced its unaudited consolidated results for the third quarter ended 31 December 2015. Revenues during the quarter at INR 14,801 crore, were lower by 9% q-o-q due to softening of oil and metal prices, partially offset by improved volumes in the Power business. Revenues for the quarter were 23% lower y-o-y, on account of the fall in oil and metal prices.
EBITDA at INR 3,212 crore was 22% lower q-o-q and 48% down y-o-y, primarily due to the fall in metal and oil prices.
Depreciation and amortisation at INR 1,770 crore, was higher by INR 110 crore q-o-q on account of assets capitalized in Q3 FY2016 at Aluminium and Power, and a one-time depreciation charge at Lisheen post closure. Depreciation was also lower driven by a change in the useful life of the company's metals and mining assets, effected at the end of the last financial year. This was partially offset by the capitalisation of new capacities at Oil & Gas, Aluminium and Power business, over the last year.
Attributable Profit After Tax (PAT) for the quarter is at INR 18 crore. Attributable EPS for the quarter was at INR 0.06 per share compared to INR 3.28 per share in Q2, primarily due to lower commodity prices.
The company is actively managing its balance sheet in light of the current commodity price environment, with a focus on maximizing free cash flow; refinancing and terming out maturing debt; and simplifying the group structure. Vedanta's financial position remains robust with cash and liquid investments of INR 50,685 crore as on December 31, 2015.
Gross debt and net debt were at INR 80,952 crore and INR 30,267 crore respectively, at 31 December 2015, higher than INR 79,433 and 27,105 crore at 30 September 2015. Gross debt and net debt were higher over the quarter primarily on account of project capex, unwinding of working capital as guided last quarter, and payments of dividends.
Aluminium business highlights:
• Record metal production
• 7% lower cost of production q-o-q driven by cost optimisation initiatives
• Received approval for conversion of 3 units of 2,400 MW Jharsuguda IPP (independent power producer) to CPP (captive power plants)
Tom Albanese, Chief Executive Officer, Vedanta Limited, said: "In the weak commodity price environment, we remain committed to optimising our operations, leveraging our high quality asset base, and proactively managing our balance sheet. I am encouraged to see the positive results of our cost reduction programme gaining momentum, and believe that this relentless focus on efficiency will not only make our business more resilient through the cycle but position us favourably for any future improvement in market conditions. Despite challenging market conditions, these efforts have allowed us to generate a robust EBITDA margin of 26%."
