Directory Image
This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Privacy Policy.

Vedanta H1 down, no need for fraud probe provisions

Author: Lutian Lutian
by Lutian Lutian
Posted: Mar 08, 2016

H1 EPS falls 44 pct to 68.5 cents on weak prices * No need for provisions from fraud probe of unit * Sees early signs of global economic recovery By Eric Onstad LONDON, Nov 5 (Reuters) - India-focused mining group Vedanta Resources Plc said no provisions were needed for a fraud probe into its iron ore unit as it posted a steep fall in first-half profit due to weaker metals prices. Unit Sesa Goa, India's biggest iron ore exporter, said on Oct. 29 that it was under investigation by India's Serious Fraud Investigation Office for financial and other irregularities, sparking a slide in its shares. But Vedanta Chief Executive M.S. Mehta said on Thursday the probe related to issues in 2003, four years before Vedanta bought its 51 percent stake in Sesa. "

It has nothing to do with Vedanta and our understanding is that it's a very old matter and not of great significance," he told a conference call. "So we don't need to provide any provisions in the books or accounts because it doesn't relate to those kind of cases." London-listed Vedanta said basic earnings per share for the six months to end September fell 44 percent to 68.5 cents, beating a consensus forecast of 57 cents from eight analysts polled by the company. The better-than-expected performance was driven by a lower tax rate and foreign exchange gains, Morgan Stanley said in a note. Some analysts, however, faulted the cost performance at the firm's Konkola Copper Mines (KCM) in Zambia of $1.69 per lb, above the year-end target of $1.35. "Divisional performance in Q2... was very respectable overall," Cazenove said. "The only disappointment was KCM." Vedanta shares, which have outperformed the UK mining index by 40 percent this year, dipped 3.5 percent to 2,210 pence by 0945 GMT, compared to a 1.6 percent fall in the mining index as metals prices fell. MORE GROWTH The group -- which has operations in India, Australia and Zambia -- said its strong balance sheet allowed it to continue investing in new mines and expanding operations as other companies cut back during the economic downturn. Vedanta aims to triple iron ore output and boost aluminium production fivefold by 2013. "

The balance sheet looks if anything overcapitalised, which suggests plenty of capacity to continue growing aggressively," Cazenoze said. Vedanta said it had net debt of $969 million with cash and liquid investments of $6 billion. "Expansionary capital expenditure in the period was $1.79 billion, in what we anticipate will be the peak year for the current organic growth programme," Chairman Anil Agarwal said. Vedanta was upbeat about how the world was rebounding from the global recession. "We appear to be witnessing the early signs of economic recovery globally," Agarwal said. "We expect that the economic and industrial growth in India will help underpin the demand for our products." The group proposed an interim dividend of 17.5 cents, up from 16.5 cents last year, and said it remained committed to its progressive dividend policy. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 41 percent to $746 million, while revenue declined 25 percent to $2.98 billion. The price of metals were hit hard last year amid the global financial crisis, but have recovered some of that lost ground this year. The price of zinc -- Vedanta's most profitable metal accounting for half of core earnings -- has bounced 85 percent this year, but it is still 23 percent below its peak last year. Earlier this month, Vedanta forecast higher production in the second half after it posted strong output gains for most metals in its fiscal second quarter. Refined zinc output gained 12.5 percent in the first half to 280,000 tonnes, while production of iron ore, its next most profitable product, climbed 15.1 percent to 8.2 million tonnes.

Related Tags:5052 aluminum plate, 7075 aluminum plate, 8011 aluminum foil

About the Author

Detect metals co.,ltd come from china, this is big supplier of the materials, inculding stainless steel, aluminum, copper

Rate this Article
Leave a Comment
Author Thumbnail
I Agree:
Comment 
Pictures
Author: Lutian Lutian

Lutian Lutian

Member since: Jul 01, 2015
Published articles: 19

Related Articles