JOHANNESBURG (miningweekly.com) – Diversified global natural resources group Vedanta Resources has posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $1.2-billion, with a margin of 33% for the first six months of the 2017 financial year, ended September 30.
While this was a 4% decrease on Ebitda for the prior year, the company still considers it a strong performance, noting that it was driven by commodity prices recovering from the lows of early 2016.
The company also generated positive free cash flow of $166-million, as a result of operational expenditure and working capital optimisation.
While its revenues for the six months fell 15% to $4.9-billion, the company saw a substantial increase in its operating profit to $720-million from $578-million in the six months to September 30, 2015.
Vedanta also managed to narrow its losses, with an underlying loss a share of $0.18 compared with the prior comparable period’s $0.57, and a basic loss a share of $0.23 compared with a loss of share $1.17 in the prior comparable period, reflecting the benefits of cost optimisation.
“Operationally, we had a strong first half, during which we delivered on our guidance of ramping up production of aluminium, power and iron-ore, and we continued to drive down costs at all our businesses,” chairperson Anil Argawal said in a statement.
It in its aluminium division, Vedanta achieved its highest-ever interim production of 541 000 t, with output partially impacted by pot outages. However, these have not led to any significant change to its full-year production guidance of 1.4-million tonnes.
While its Zambian copper operations have also steadily improved with significant cost reductions, the company was adversely affected by average copper prices falling 16% to $4 751/t, resulting in the operation’s profit dropping by $44-million.
At its zinc international operations, prestripping work at the Gamsberg zinc mine in South Africa is progressing well, with major contracts currently being finalised.
“We plan to produce the first tonnes from this project in mid-2018. We will ramp up to the full capacity of 250 000 t in 9 to 12 months. We are also working on extending the mine life for Skorpion by two years,” Argawal noted.