Mining conglomerate Vedanta Resources plunged into a $217 million (Rs 1,367 crore) loss for the six months ended September 30 amid lower metal prices and currency losses. The London-listed company had reported a profit of $173.6 million in the corresponding period of 2012-13.
“Profit before tax was significantly impacted by other gains and losses mainly due to higher rupee depreciation resulting in mark to market foreign exchange losses of USD 429 million,” Vedanta said today in a statement. Core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA) declined 14 per cent to $2.207 billion from $2.571 billion a year earlier. According to the company, a 14 per cent decline in average commodity prices, a 52 per cent rise in net interest expenses ($358 million) and $429 million of foreign exchange losses were the major factors behind the loss in the first half. A higher share of profit petroleum paid to the Indian government in the oil and gas business, the absence of iron ore mining in Karnataka and Goa and lower volumes in Zambia’s Konkola Copper Mines were among the other factors that affected Vedanta’s performance, the company said. “Our EBITDA margins remain strong at 44.5 per cent in the first half, demonstrating the resilience of our low-cost diversified portfolio,” company Chairman Anil Agarwal said. The company said it expects to resume iron ore mining in Karnataka soon and is awaiting final statutory clearance to reopen its mine in Chitradurga district of the state. It said the Supreme Court has allowed the sale of iron ore inventory in Goa and mandated the setting up of an expert committee to determine how much mining should be allowed in the state. Talking about its copper business in Zambia, where the company faces opposition to its plan to cut jobs, Agarwal said Vedanta is “committed to delivering an operational turnaround” and remains engaged with stakeholders, including the Zambian government. The Zambian operations have been affected by lower volumes and higher costs. While revenue had declined 21 per cent to $686.7 million, EBITDA has dropped 45 per cent to $101.3 million. Operating profit fell to USD 15 million, down 84 per cent. Vedanta announced an interim dividend of 22 cents per share.