Higher volumes, prices push Vedanta unit to Q3 profit rise

Third quarter pre-tax profits at Vendanta Resources' main subsidiary rose to INR3,884 crore from INR1,120 crore in 2016 thanks to a recovery in commodity prices combined with an increase in volumes and cost efficiencies.

Sales at Vedanta Ltd for the period came in 31% higher year-on-year at INR19,320 crore.

Quarter-on-quarter revenue was up 23%, driven by higher volumes from Zinc India, increased volumes at Iron Ore on account of the monsoon season in the second quarter, ramp-up at the Aluminium and Power businesses, and higher metal and oil prices, the company said.

This was partially offset by lower volumes from Oil & Gas due to a planned shutdown during the quarter, and the Skorpion mine at Zinc International, Vedanta said.

Increased third quarter revenues were the result of higher volumes at Iron Ore due to recommencement of operations, ramp-up of volumes at the Aluminium and Power businesses and higher volumes at Copper India and Zinc India.

This was partially offset by lower volumes from Oil & Gas, and Zinc International due to closure of the Lisheen mine, in the third quarter of 2016.

Chief executive Tom Albanese said the company's financial position remained “robust” and it continued to strengthen the balance sheet by maximising free cash flow and reducing debt.

He added that the Vedanta Limited and Cairn India merger is expected to be completed in the first financial quarter of 2017.