Vedanta profit up as currency volatility eases, but hit by volume falls

Vedanta Resources PLC Thursday said its pretax profit more than doubled in the first half of its financial year as currency volatility eased, but its operating profit was hit by lower volumes at several of its operations, offsetting a 6% revenue increase on the back of higher metals prices.

The metals and oil and gas producer took a USD460.1 million currency hit in the first half its last financial year, but this dropped to GBP78.4 million this year due to a reduction in currency volatility, particularly in the exchange rate between the Indian rupee and the US dollar.

Its pretax profit soared to USD639.6 million in the six months ended August 30, more than double the USD261.1 million reported a year earlier, as a result.

Revenue rose to USD6.46 billion in the half, from USD6.08 billion a year earlier, driven by higher metals prices, particularly for zinc and aluminium, but its closely-watched earnings before interest, tax, depreciation and amortisation fell 5% to USD2.1 billion as the Ebitda margin dropped to 32.6%, from 36.3%.

During the first half, the average London Metal Exchange price for zinc was up 19% to USD2,196 per tonne and aluminium prices rose 5% to USD1,896 per tonne. Weaker brent prices of USD105.70 per barrel, down 0.8% compared to 2013, slightly offset the metal price increases.

Vedanta shares were up 0.9% to 804.00 pence per share on Thursday morning.