Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
Indian mining group Vedanta reported a 27% drop in fourth-quarter profit on Thursday, reflecting weaker prices of major metals like aluminum and zinc amid ballooning finance costs.
The oils-to-metals conglomerate, led by billionaire Anil Agarwal, posted a consolidated net profit of 13.69 billion rupees (about $164 million), falling behind analysts’ estimates of 21.10 billion rupees, as per LSEG data.
The company also posted a jump in expenses, with finance costs climbing nearly 34%.
Domestic zinc and aluminum prices remained soft during the January-March period as global metal prices were subdued on demand concerns from top consumer China amid a sluggish economic recovery and property market woes in Asia’s largest economy.
The biggest revenue drop came from its zinc and lead vertical – the second-biggest segment – falling 16%, leading to a 6% drop in the total revenue of the company.
Revenue from its aluminum and copper businesses – which are the largest and third-largest contributors to revenue – also fell 1.5% and 1.8%, respectively.
The drop in earnings came at a time when the natural resources giant is in the middle of planning an overhaul of its operations to unlock higher value for its shareholders after it saw a slew of plant shutdowns and earnings cuts.
The firm’s investors are currently focused on the conglomerate’s major growth and expansion projects while helping its holding company, Vedanta Resources, to reduce its significant debt.
Net profit at unit Hindustan Zinc fell 21% during the quarter on lower zinc prices, it announced last week.
($1 = 83.3050 Indian rupees)
(By Manvi Pant; Editing by Sohini Goswami)
Comments