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Vedanta Q3 revenue falls on Tuticorin plant shutdown; key takeaways

Ebitda margin stood at 29 per cent in Q3, up from 26 per cent in September quarter.|
Jan 31, 2019, 06.53 PM IST
Ebitda margin stood at 29 per cent in Q3, up from 26 per cent in September quarter.
NEW DELHI: Vedanta on Thursday posted a 22 per cent drop in year-on-year (YoY) net profit at Rs 2,332 crore for the quarter ended December 31. The Anil Agarwal-led company had reported Rs 2,989 crore profi t in the corresponding quarter last year.

Net sales for the quarter fell 3 per cent to Rs 23,669 crore for the quarter compared with Rs 24,361 crore in the same quarter last year. Here are the key takeaways from the results:

Revenue fall on shutdown in copper smelter: The 3 per cent fall in sales were largely on account of shutdown of copper smelter at Tuticorin and lower commodity prices. The number, meanwhile, were supported by currency depreciation and higher volumes at Electrosteel and aluminium business.

Debt rises mainly on dividend payment: The company said its net debt stood at Rs 39,531 crore as of December quarter, compared with Rs 26,357 crore as of October 1. Debt rose mainly because of dividend payout during the quarter, the company said. Overall, Vedanta had Rs 70,100 crore in consolidated debt, but has cash and liquid investments of Rs 30,500 crore. Out of its total debt, 92 per cent is rupee denominated while the rest 8 per cent is foreign currency debt.

Ebitda drops on weak prices: The company said its Ebitda for the quarter fell 11 per cent YoY to Rs 5,953 crore mainly on account of lower commodity prices, input commodity inflation and shutdown of copper smelter at Tuticorin. The number were partially offset by currency depreciation and write back of liability, pursuant to settlement agreement with a contractor at Balco, it said.

Ebitda margin stood at 29 per cent, up from 26 per cent in September quarter, but down from 35 per cent in the year-ago quarter.

Investment income up on mark-to-market gains: Investment income for third quarter stood at Rs 1,043 crore, up Rs 455 crore sequentially and Rs 562 crore YoY, primarily due to mark-to-market gain on investments during the current quarter. This also includes mark-to-market gains on a treasury investment made by its overseas subsidiary through a purchase of economic interest in a structured investment in Anglo American Plc from its ultimate parent, Volcan Investments.
Finance cost jump: Finance cost during the quarter at Rs 1,358 crore was higher by Rs 233 crore YoY, mainly due to higher gross borrowings and increase in interest rates, partially offset by higher capitalisation during the period.

Appointment of Srinivasan Venkatakrishnan as CEO: A qualified Chartered Accountant, Venkatakrishnan is the CEO and a member of the Board of Directors of Vedanta Resources, the holding Company effective from August 31, 2018. He has been CEO of AngloGold Ashanti, the world's largest emerging market gold producer since 2013. Between 2005 and 2013, he was AngloGold Ashanti's Chief Financial Officer and prior to this, he was CFO of London-listed Ashanti Goldfields.
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