Vedanta Resources Ltd Interim Results FY2020

Vedanta Resources Ltd published their interim results FY 2020. There is a 5% decrease in revenue which accounted to $ 6.1 billion (H1 FY2019: $ 6.5 billion), mainly operated by lower commodity prices, partially offset by auxiliary volumes from the onset of Gamsberg operations and higher sales at Iron Ore Karnataka & Electrosteel.

EBITDA at US$ 1.4 billion, down 19% YoY (H1 FY2019: US$ 1.7 billion)

Operating profit before special items at US$ 0.7 billion, down 35% YoY (H1 FY2019: US$ 1.1 billion) mainly driven by lower commodity price environment and higher depreciation charge partially offset by higher volumes, softening of input commodity prices and favourable currency movement.

The adjusted EBITDA margin of 26% (H1 FY2019: 30%)

ROCE at 9.4% in H1 FY2020 (H1 FY2019: 13.8%)

 Impairment of assets at Avanstrate Inc. US$ 72 million

 Profit after tax from continuing operation at US$ 310 million (H1 FY2019: US$ 58 million) predominantly driven by a deferred tax credit of US $ 331 million and higher investment income partially offset by lower EBITDA, higher depreciation charge.

 Following the introduction of Section 115BAA in the Indian Income Tax Act 1961, the Group has re-measured its deferred tax balances leading to a deferred tax credit of US$ 331 million.

 Profit after tax from discontinued operation at US$ 521 million (includes US$ 598 million gain on deconsolidation for KCM) under an ex-parte order received from the High Court of Zambia appointing a provisional liquidator (PL) for KCM w.e.f 21 May 2019 obtained by minority shareholder ZCCM.

 Free cash flow (FCF) post-CAPEX of US$ 814 million (H1 FY2019: US$ 125 million) driven by continued focus on cost savings, working capital initiatives including power debtor's realization at TSPL, disciplined CAPEX outflow and tax refunds

Gross debt decreased to US$ 14.7 billion and net debt to US$ 9.5 billion (FY2019: US$ 16.0 billion and US$ 10.3 billion), primarily due to the repayment of borrowings and free cash flow generated during the period.

The company has generated a record alumina production from Lanjigarh refinery at 856kt, which is 27% up YoY and the aluminium production at 947kt, a down by 3% YoY. The hot metal production cost stood at $ 1,810/tonne, again a down by 9% YoY and OMC bauxite has meet 1/3^rd of the total bauxite requirement.