Revenue and earnings ahead in first half at Vedanta

Vedanta Resources revenue rose 49% year-on-year to $6.8bn, it announced on Friday, with EBITDA ahead 37% at $1.7bn, which the board said was primarily due to higher volumes and strong commodity prices

It first-half adjusted EBITDA margin for the six months to 30 September was 34%, up marginally from 33% a year ago.

Profit attributable to equity holders of the parent, before special items, increased to $21m , from a loss of $64m, while positive free cash flow after growth capex was $232m, up from $166m.

Vedanta carried gross debt of $15.1bn, a reduction of $3.1bn over the last six months, including the repayment of $1.1b of temporary borrowing at Zinc India.

Net debt stood at $9.0bn, an increase of $0.5bn in the last six months, which the board said was due to special dividends paid by subsidiaries.

Underlying earnings per share totalled 9.5 cents, swinging from a loss of 18.8 cents per share a year ago, with a basic loss per share of 23.7 cents, compared to a loss of 23.2 cents at the same time last year.

The board declared an interim dividend of 24 cents per share, up from 20 cents per share.

It also noted that a “proactive refinancing” of $1.84bn was completed at Vedanta in August, which extended the average debt maturity by 1.5 years at the Vedanta Resources plc level, lowered the average cost of borrowing and resulted in “no significant” debt maturities until December 2018.

“Our performance in the half year underlines that Vedanta's consistent strategy is delivering results,” said chairman Anil Agarwal.

“We are seeing the benefits of growth at Zinc and Aluminium, and the benefits of strong operating performance overall, alongside higher commodities prices.”

Agarwal said Vedanta remained “committed” to delivering strong shareholder returns and maintaining a strong balance sheet.

“At the same time, we continue to deploy selective capital into profitable growth projects in line with our disciplined capital allocation framework, to drive industry-leading growth.

“We are pleased to announce the commencement of growth projects in our Oil and Gas business and Copper India business.

“Vedanta is uniquely positioned to capture the benefits of sustained commodity demand in India for many years to come, through our operating performance and selective growth.”