Vedanta’s profit surges 79% to $337 m

Metal and mining major Vedanta Resources on Thursday announced that it has posted a growth of 79% in its net profit to $337 million for the first half ended on September 30, 2010, against $188.2 million in the corresponding period last year.

Revenues during the period stood at $4.58 billion, up 53.8% compared to $2.97 billion in H1 FY 2010 due to higher volumes and realisations across all its operations. Earnings before interest, depreciation, tax and amortisation （EBIDTA） of $ 1.3 billion was higher 80.7% year-on-year （y-o-y）. Operating profit grew 101% yoy at $985 million. The company also said it continues to evaluate the possibility of listing its subsidiaries, Sterlite Energy and its Zambian Konkola Copper Mines. Mahendra Mehta, chief executive of Vedanta revealed the company may publicly list its Zambian copper business unit's shares as early as this year. “The company is evaluating the timetable for listing its Konkola Copper Mines division in order to unlock value. The listing is even possible during the current year,” he said in a conference call with analysts on Thursday.

Meanwhile, Vedanta’s revenue from all streams including aluminum, copper, zinc, iron ore and energy increased year-on-year. Copper revenues advanced 33.3% from last year to $2.183 billion. Mined metal production grew 16.7% to 14,000 tonnes in Australia. Production of copper cathode increased about 45% in copper-Zambia to 113,000 tonnes, while it slipped over 14% to 145,000 tonnes in India. Zinc revenues grew 35.5% to $880.6 million and mined metal production rose 3.2% to 387,000 tonnes. Aluminum revenue surged 177% to $666.6 million and production increased 23.3% to 302,000 tonnes. Anil Agarwal, chairman of Vedanta Resources plc said, “We remain focused on delivering our strong organic growth programme and are well placed to benefit from the India’s tremendous growth prospects.

The announced acquisitions of Anglo American's Zinc Assets and a majority stake in Cairn India have embedded growth options, and will create significant long term value for our shareholders,” he said. Vedanta generated $479 million of free cash flow after investing c. $1.1 billion in growth capex. Net debt and gearing as on September 30, 2010 stands at $1.6 billion and 11.6% respectively.