Vedanta's Q3 net plunges sharp 99% to Rs 18 cr

Metals and mining conglomerate Vedanta Ltd today reported a steep 98.9% fall in its consolidated net profit at Rs 17.91 crore for the third quarter ended December, weighed down by challenging market conditions.

The firm led by NRI billionaire Anil Agarwal had reported a net profit of Rs 1,587.50 crore in the year-ago period, it said in a BSE filing.

Total consolidated income of the metals-to-oil group fell 22.6% to Rs 14,876.55 crore in October-December this fiscal, from Rs 19,218.90 crore during the same quarter in 2014-15.

The firm, however, managed to bring down its expenses by 12% to Rs 13,541.18 crore, from Rs 15,400.27 crore during the reported quarter.

Vedanta CEO Tom Albanese said: "In the weak commodity price environment, we remain committed to optimising our operations, leveraging our high quality asset base and proactively managing our balancesheet."

He further said: "I am encouraged to see positive results of our cost reduction programme gaining momentum, and believe that this relentless focus on efficiency will not only make our business more resilient through the cycle, but position us favourably for any future improvement in market conditions."

Despite challenging market conditions, these efforts have allowed the firm to generate a robust Ebitda margin of 26%, he added.

The company said it is actively managing balancesheet, with a focus on optimising opex and capex to maximise free cash flow, refinancing and terming out maturing debt and simplifying the group structure.

"Our financial position remains robust with cash and liquid investments of Rs 50,685 crore, which is invested in debt-related mutual funds, bank deposits and bonds, and undrawn committed facilities of about Rs 4,800 crore as on December 31, 2015," it added.

The firm said revenues year-on-year were lower on account of a fall in oil and metal prices, but was partially offset by higher volumes at Zinc India and Power.

Net profit was impacted "primarily due to lower commodity prices", it added.

Gross debt and net debt were at Rs 80,952 crore and Rs 30,267 crore, respectively, as of December 31, 2015, higher than Rs 79,433 crore and Rs 27,105 crore as of September 30, 2015.

Gross debt and net debt were higher over the quarter primarily on account of project capex, unwinding of working capital as guided last quarter, and payments of dividends.

Out of the total debt of Rs 80,952 crore, the rupee/dollar split is approximately 50% each. Further, the gross debt comprises long-term loans of Rs 67,166 crore and short-term loans of Rs 13,786 crore.

Shares of the company were trading at Rs 66.85 apiece, up 4.70%, on BSE as analysts said the result was better than expected following price crash in the metals market amid subdued demand.