13th Nov 2014 08:34
LONDON (Alliance News) - Vedanta Resources PLC Thursday said its pretax profit more than doubled in the first half of its financial year as currency volatility eased, but its operating profit was hit by lower volumes at several of its operations, offsetting a 6% revenue increase on the back of higher metals prices.
The metals and oil and gas producer took a USD460.1 million currency hit in the first half its last financial year, but this dropped to GBP78.4 million this year due to a reduction in currency volatility, particularly in the exchange rate between the Indian rupee and the US dollar.
Its pretax profit soared to USD639.6 million in the six months ended August 30, more than double the USD261.1 million reported a year earlier, as a result.
That allowed it to raise its interim dividend to 23 US cents a share, from 22 cents.
Revenue rose to USD6.46 billion in the half, from USD6.08 billion a year earlier, driven by higher metals prices, particularly for zinc and aluminium, but its closely-watched earnings before interest, tax, depreciation and amortisation fell 5% to USD2.1 billion as the Ebitda margin dropped to 32.6%, from 36.3%.
It blamed the Ebitda decline on lower volumes and higher cost at KCM and Oil & Gas and its Australian mine being placed on care and maintenance. It said volumes at Zinc India and Oil & Gas are expected to improve in the second half due to mine sequencing and higher plant availability respectively.
An 18% fall in volumes at its Zinc India operation wiped USD90.0 million off its operating profit, it said. Lower volumes at Copper Zambia hit its operating profit by USD27.0 million, while a 17% decline in production in its international zinc operations, caused by lower ore grades and a decline in output at the Lisheen mine, wiped USD50 million off its operating profit.
During the first half, the average London Metal Exchange price for zinc was up 19% to USD2,196 per tonne and aluminium prices rose 5% to USD1,896 per tonne. Weaker brent prices of USD105.70 per barrel, down 0.8% compared to 2013, slightly offset the metal price increases.
Oil and gas production during the first half saw a 3% decline to 206,125 barrels of oil equivalent per day, compared to 212,873 barrels of oil equivalent per day. Working interest production also decreased by 1% to 130,502 barrels of oil equivalent per day.
The company's three year capital expenditure programme of USD3.00 billion on its oil and gas operations is continuing until the end of the 2017 financial year, aimed at enhancing oil recovery from producing fields and developing a long term sustainable gas business, it said in a statement.
"We have maintained our progressive dividend policy throughout. Our success over this time is also a testament to India, our home base, where we have always seen great potential. We are confident that with the new Government focused on economic growth, Vedanta, with its strong presence and long term commitment to India, is well-placed to contribute to the country's economic progress," said Chairman Anil Agarwal.
Vedanta shares were up 0.9% to 804.00 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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