Vedanta profit hurt by costs, lower Zambia output

But group revenue rises 6% to $6.46 billion on higher premiums for zinc, aluminium

Vedanta Resources Plc reported a 5% fall in first-half core earnings due to lower production and higher costs at its oil and gas and Zambian copper businesses, where the company said it was continuing to face challenges.

The London-based miner, which has most of its assets in India, said earnings before interest, tax, depreciation and amortisation fell to $2.1 billion in the six months ended Sept. 30 from $2.21 billion a year earlier.

Vedanta said lower volumes at Zinc India, lower Brent crude prices, a higher share of profit on petroleum payable to the Government of India and a planned maintenance shutdown at Cairn India Ltd, its oil and gas operations, had also hurt the company in the first half.

The miner reported an 8% fall in oil and gas production and a 12% decline in copper output at its Zambian business last month.

Vedanta bought a controlling stake in Zambia's Konkola Copper Mines (KCM) a decade ago. The business, intended to be part of a push beyond the company's origins in India, accounts for about 8% of its total revenue.

"At Copper-Zambia, we remain committed to delivering an operational turnaround, despite several challenges. We continue to engage with various stakeholders, including the Government of Zambia, to improve productivity, volumes and profitability," the company said in a statement.

However, group revenue rose 6% to $6.46 billion as Vedanta was able to recognise higher premiums for zinc and aluminium and produce more at its India copper business.

Realised premiums for aluminium rose 32% in the first half of the year, while zinc premium almost doubled.

The company also announced an interim dividend of 23 cents per share, up from 22 cents a year earlier.

Vedanta shares were down 0.4% at 793 pence at 0824 GMT on the London Stock Exchange. They have lost more than 30% in value since the beginning of the year.