Vedanta Q3 revenue and earnings rise as production ramps up

Vedanta Resources’ third quarter revenue and earnings were up due to commodity prices, and a ramp up of aluminium, power and ore capacities.

In the third quarter ended 31 December, revenue increased 26% year-on-year to $3.06bn, compared to the same period the previous year, while earnings before interest, tax, depreciation and amortisation (EBITDA) surged 79% to $882.3m YoY due to higher commodity prices and production volumes.

The FTSE 100 company had a robust EBITDA margin of 38% and gross debt was $300m lower by $300m.

Zinc produced in India saw production up 44% quarter-on-quarter to 276,000 tonnes and was in line with mine plan, and integrated metal production also increased with zinc 38%, lead 26% and silver 10%.

Iron ore achieved full year production capacity in January at the Goa site with 5.5m tonnes and at Karnataka with 2.3m tonnes while aluminium production rose 37% to 319,000 tonnes.

Chief executive Tom Albanese said the changes during the quarter represented "substantial" operational progress.

"We are very excited about our Gamsberg zinc project in South Africa where first ore is expected in mid-2018. At KCM, we are committed to the turnaround of this asset and continue to work towards it. Our rising capacity utilisations and the continued focus on costs, alongside stronger commodity prices, enabled us to deliver 79% higher EBITDA and strong free cash flow.

“In line with our stated financial strategy to extend near-term maturities and optimise the balance sheet, we successfully issued a $1bn bond in January 2017 to proactively refinance part of our 2018 and 2019 bond maturities."