Vedanta Ltd Q1 net drops 35% to Rs 866 cr

Company saw its net sales decline marginally to Rs 16,951.88 crore during the quarter

Vedanta Ltd today reported a 35.44% fall in net profit to Rs 865.94 crore for the June quarter on a consolidated basis on account of volatile commodity prices among other factors.

Billionaire Anil Agarwal-led mining conglomerate had reported a net profit of Rs 1,341.23 crore during the first quarter of 2014-15.

The company, which was earlier known as Sesa Sterlite, saw its net sales decline marginally to Rs 16,951.88 crore during the quarter from Rs 17,055.5 crore in the corresponding period last fiscal.

Total expenses of the company rose to Rs 14,742.34 crore during the period as against Rs 13,599.20 in the year-ago period

"As a result of lower EBITDA partially offset by lower finance cost, forex gain and lower depreciation and amortisation, attributable PAT at Rs 866 crore was 35 per cent lower in Q1FY2016 as compared to Rs 1,341 crore (before exceptional items) in Q1FY2015," Vedanta said in a statement.

Exceptional items of Rs 2,128 crore (gross of tax) for Q1 FY2015 pertain to change in method of depreciation at Cairn India for the period up to 31st March 2014, it said.

Tom Albanese CEO of Vedanta Limited said: "In Q1 we saw continued volatility in commodity prices, but zinc has held up quite well in view of its strong fundamentals and is now the largest contributor to our EBITDA."

He added, "We continue to focus on improving efficiency, costs, and enhancing production across our well-invested asset base. We have broken ground at the Gamsberg Zinc project in South Africa and remain on track to restart iron ore production at Goa following the monsoons. Our diversified business model supported by strong operating strengths and structurally low cost assets will enable robust long term returns to stakeholders."

The company's gross debt increased by Rs 1,778 crore to Rs 79,530 crore, on account of funding project payments and temporary working capital requirements.

"Debt levels are expected to reduce as working capital is repaid in Q2 FY2016," the statement said.

It added that out of the total debt of Rs 79,530 crore, debt in INR currency is Rs 38,616 crore and balance Rs 40,914 crore is in US dollar.

Further, the gross debt comprises of long-term loans of Rs 64,825 crore and short-term working capital loans of Rs 14,705 crore. "Average cost of borrowing was 7.9 per cent", it said.

The shares of the company closed at Rs 130.60 apiece on BSE, up 1.67 per cent from the previous close.