Increased Aluminium Production Strengthens Vedanta’s Bottom Line in Q1

Mumbai metals miner Vedanta Limited released financial and production results for the first quarter of FY 2018 last week. The firm’s numbers were higher across the board, largely due to gains made by its aluminium operations.

Vedanta reported net sales of ₹18,203 crore, a 27 percent increase year-on-year from last year’s Q1 total of ₹14,365 crore. The firm chalks up the increase to higher volumes recorded at Zinc India and a ramp-up of its aluminium business, coupled with overall higher aluminium prices in the quarter.

EBITDA for the quarter totaled ₹4,965 crore, a 40 percent year-on-year increase. Profit after taxes (PAT) but before exceptional items totaled ₹2,270 crore, up 67 percent year on year from last Q1’s total of ₹1,358 crore, and attributable PAT before exceptional items totaled ₹1,525 crore, an increase of two times year-on-year from last Q1’s number of ₹754 crore.

Vedanta produced 352 thousand metric tons of primary aluminium in Q1, up 44 percent year on year, and identical to last quarter. Lanjigarh led the way, turning out 303 thousand metric tons in the quarter, good for a ten-percent increase year on year, but off by 3 percent over last quarter. Driving production increases in the quarter was ramp-ups at Jharsuguda-II and BALCO-II, however the outage in April at Jharsuguda-I put a dent in production relative to the prior quarter. Vedanta says that 35 of the 228 affected pots are back online at the moment, with the remainder expected to return to production by the third quarter of FY2018.

Vedanta’s run rate for the quarter totaled 1.4 million metric tons per annum, with stabilized production totaling approximately 320 thousand metric tons. The firm indicates that it is planning for a total production of around between 1.5 million and 1.6 million metric tons in the current fiscal year.

“We have started the year on a positive note, with our Net Profit for Q1 doubling over last year,” opined Vedanta’s CEO Tom Albanese. “Our Zinc and Oil & Gas businesses have delivered a strong quarter. Vedanta is a world leader in Zinc, and Zinc prices have strengthened since the quarter end on continued global supply deficits. Our continued ramp-up in the Aluminium business has helped us exit the quarter on a strong production run rate of 1.4 mtpa. We are realizing the true benefits of Vedanta’s diversified portfolio.”

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