Low output pulls Vedanta net profit down 41% to Rs 2,464 crore in Q3

Metals and mining major Vedanta on Friday reported a 41 per cent year-on-year (YoY) fall in consolidated net profit (attributable to owners) to Rs 2,464 crore for the quarter ended December 31, 2022. This was mainly because the company was hit by lower output and weak commodity prices.

Q3 bottom line missed Bloomberg consensus estimates, which had pegged net profit for the quarter at Rs 5,516 crore. The company’s net profit a year ago stood at Rs 4,164 crore. As compared to the previous quarter (Q2 of FY23), net profit was up 36.3 per cent.

In its recent operational update for Q3, the company had indicated that aluminium and steel production had declined by 2 per cent and 13 per cent each YoY. Also, iron ore sales had declined by 18 per cent versus a year ago. The company’s average daily gross operated production for oil & gas in Q3 declined by 9 per cent versus the corresponding period last year, the update said. The impact of lower output and metal sales reflected in the Q3 consolidated revenue, which was flat at Rs 33,691 crore. Revenue was marginally ahead of Bloomberg’s estimates for Q3, which was Rs 33,680 crore. A year ago, the company had reported revenue of Rs 33,697 crore. Sequentially, Vedanta’s revenue was down 7 per cent.

The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) in Q3 was Rs 7,100 crore, down 35 per cent compared to a year ago. It was down nearly 12 per cent on a sequential basis as the company struggled with lower strategic hedging gains. Depreciation and amortisation charges also increased 4 per cent compared to the July-September quarter to Rs 2,720 crore. This was due to a higher depletion charge in the company’s oil and gas business. Vedanta reported an EBITDA margin of 24 per cent in Q3 against 37 per cent last year. It was 25 per cent in the July-September quarter.

The company’s board on Friday also approved its fourth interim dividend of Rs 12.50 per equity share, amounting to Rs 4,647 crore. The record date for this dividend payment is February 4, 2023. Including the latest round, Vedanta has announced a dividend of Rs 81 per share in FY23.

In a statement, chief executive officer (CEO) Sunil Duggal said the company had approved plans for another 941 Mw renewable energy (RE) power under its group captive RE power development programme.

The company had previously announced sale of its international zinc assets to subsidiary Hindustan Zinc for a cash consideration of nearly $3 billion. This is subject to shareholder and other approvals.

On Friday, Vedanta’s shares closed on the BSE at Rs 319.85 a piece, down 1.96 per cent against the previous day’s close. During the last one year, the stock has fallen by 2.39 per cent even as the BSE Sensex has risen by 3.58 per cent.