A Rising Tide in the Global Aluminium Market Lifts Vedanta’s Boat in FY2017

A Rising Tide in the Global Aluminium Market Lifts Vedanta’s Boat in FY2017

London-based Indian metals and mining firm Vedanta Resources plc released full-year results for the fiscal year ending in March. The firm says its strong numbers reflect an ever-strengthening commodities market in addition to operational efficiencies.

The firm’s revenue increased to US$11.5 billion year-on-year, which was 7% above last fiscal’s total of US$10.7 billion, largely on account of a recovered commodity market coupled with the company’s increase in production. EBITDA rose by 37% year-on-year, from US$2.3 billion last year to US$3.2 billion in the just-ended fiscal year. The adjusted EBIDA margin of 36% also represents a rise, up from 28% in the previous year. Vedanta chalks this up to a recovered market as well, urged on by the firm’s operational efficiencies.

Gross debt rose in the fiscal year from US$16.3 billion in FY2016 to US$18.2 billion in the just-ended fiscal year. The number was driven up by a temporary loan from Hindustan Zinc Limited of US$1.2 billion in order to make a special dividend payment. Net debt also rose in the fiscal, from US$7.3 billion in 2016 to US$8.5 billion, thanks to dividends paid to minorities and the tax associated with it.

Vedanta’s FY2017 saw record production totals across several products, including aluminium. Production was up despite a pot outage in April last year, totaling 1,213 thousand metric tons, an increase year-on-year of 31.4% from last year’s total of 923 thousand metric tons. Revenue from aluminium operations totaled US$2.04 billion in the fiscal year, 20.4% better year-on-year from FY2015’s revenue of US$1.7 billion.

“We delivered a strong set of results this year and took important steps towards achieving our strategic objectives,” said Vedanta’s Chairman Anil Agarwal. “We reached record production levels across several of our businesses and I am confident of continued successful ramp ups from our world-class assets. An important milestone for us this year was the completion of the merger of Vedanta Limited and Cairn India, and our simplified group structure will support strong shareholder returns. We remain committed to a consistent strategy and de-levering the balance sheet, and look ahead to FY 2018 in a stronger financial position and with more confidence than ever.”

Also of note was CEO Tom Albanese’s announcement that he will be stepping down from his post at the end of August after over three years in the position.