Homegrown mining company Vedanta on Thursday reported strong financial performance during September quarter despite market headwinds. The Anil Agarwal-led firm posted 61 per cent year-on-year (YoY) jump in consolidated profit at Rs 2,158 crore for the second quarter of FY20.
"The firm had posted consolidated net profit at Rs 1,343 crore during the same quarter last year," Vedanta said in a filing to the Bombay Stock Exchange.
Consolidated revenue from operations declined marginally by 3 per cent to Rs 21,739 crore in Q2FY20 versus Rs 22,432 crore in Q2FY19, primarily due to headwinds in the commodity prices.
Vedanta's EBITDA (earnings before interest, tax, depreciation and amortization) fell 15 per cent YoY to Rs 4,497 crore versus Rs 5,281 in the year-ago period, impacted by lower commodity prices. The operating margin slipped to 25 per cent during the quarter under review, against 26 per cent in the year-ago period.
Depreciation and amortisation for Q2FY20 was at Rs 2,395 crore, 24 per cent higher on annual basis and 11 per cent higher sequentially. This was mainly due to higher ore production in zinc businesses, commencement of Gamsberg operations and higher charge in oil and gas due to capitalisation.
Finance cost for Q2FY20 stood at Rs 1,340 crore, lower by 9 per cent YoY, primarily due to reduction in gross borrowings, while on a sequential basis the finance cost remained flat.
Commenting on Q2 earnings, Vedanta, Chief Executive Officer, Srinivasan Venkatakrishnan said, "We are at an exciting transition that will see the company accelerate in the expansion of its reserves and resource base over coming quarters. This expansion is being delivered through strict capital allocation and balance sheet focus aimed at creating value for our stakeholders."
"As we look forward to the year, we have in place the building blocks to enhance our performance in the three key businesses. We have immense confidence in being able to deliver the best from our assets and people whilst always being committed to our core values around ethics, governance and social responsibility", Venkatakrishnan added.
As of September 30, 2019, the Indian miner had a gross debt of Rs 55,898 crore, lower by Rs 3,279 crore as compared to June quarter, helped by repayment of debt at TSPL and Vedanta Standalone.
Net debt was at Rs 20,081 crore, lower by Rs 8,322 crores as compared to June 30, 2019, primarily due to free cash flow generation during the period and realisation of power debtors at TSPL.
Vedanta's board has also approved the re-appointment of GR Arun Kumar as the Whole-Time Director designated as Chief Financial Officer of the company for a further period of 2 years, subject to the shareholders' approval at the forthcoming annual general meeting.
Following Q2 earnings report, Vedanta share closed 2.77 per cent lower at Rs 1,44.15 apiece on the BSE.
Edited by Chitranjan Kumar