India focused miner Vedanta's profits soar 26%
Firm set to go private gains from rising aluminium production and commodity prices
Miner Vedanta Resources, set to be taken private by chairman Anil Agarwal, reported on Monday a 26.3 per cent rise in quarterly core earnings on higher aluminium production and commodity prices, and said it was hopeful of restarting its copper smelter in India.
The London-listed company, which operates primarily in India and Africa, has been benefiting from a strong recovery in the prices of metals and oil and gas, and had posted a double-digit percentage growth in core earnings last year. The price rebound had also prompted the miner to expand the production of zinc and aluminium.
However, Vedanta reported a core loss of $15 million from copper production, for the three months ended June 30, as output from India fell 73.3 per cent to 24,000 tonnes of copper cathodes. The company had a core profit of $32m from copper in the year-earlier quarter.
Copper production plunged as the company was forced to temporarily shut down its Tuticorin copper smelter in southern India amid protests by local residents over alleged environmental violations. The protests turned violent in May, resulting in the police opening fire and killing 13.
"We are hopeful about the restart of the copper plant and would expect it to produce 100 kt [kilotonnes] of copper cathodes per quarter in line with its capacity on restart," the company said on Monday.
The fall in copper output was offset by a 37 per cent rise in aluminium production, which contributed nearly a third of Vedanta's total revenue in the quarter.
The company's quarterly zinc output also fell, by 20 per cent, hurt by lower grades.
Vedanta's earnings before interest, taxes, depreciation and amortisation rose to $983 million, for the three months ended June 30, from $778m a year earlier. Revenue rose 15 per cent to $3.55 billion.
Mr Agarwal's family trust last week offered about $1bn in cash to take the miner private.
Shares of Vedanta Resources were little changed on the London Stock Exchange in early trade.
Updated: August 6, 2018 11:42 AM