Mining conglomerate Vedanta Ltd today posted 17 per cent rise in consolidated net profit to Rs 1,251.13 crore for the September quarter on better operating performance and said it is open to the idea of venturing into the steel business.
The company had posted consolidated net profit of Rs 1,068.95 crore in the year-ago period.
These numbers are after taxes, minority interest and share in jointly-controlled entities and associates.
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"Higher net profit is primarily driven by operating performance. So volumes and cost are getting us higher EBITDA helped along by better prices," Vedanta President Finance and Group CFO G R Arun Kumar told reporters here.
"So it is really the operating performance, its driving it all," Kumar said.
However, the total income declined to Rs 18,029.76 crore for the second quarter of the current fiscal, from Rs 18,898.27 crore in the year-ago period.
Replying to a query, Vedanta Ltd Chief Executive Officer Tom Albanese said, "There will be in future increased steel demand in India. So we would keep our eyes open for the opportunities for additional value added businesses."
He further said: "I think in the first instance we would like to make sure that our iron ore business is strong and then we will make sure that our existing value added business stays strong and then with that strength we can consider other opportunities as well."
About the ongoing stress in the steel sector, he said: "We are trying to look around the corner. We are trying to envision a time when urbanisation picks up in India, when you see more government spending on infrastructure...When you see basically Indian families demanding higher quality housing, when your see basically more manufacturing capacity developing in India.
"What will future India look like if you have 8-9 per cent GDP growth over the next 10 years. That is going to be a huge steel consumer," he said.
Vedanta said revenues in the second quarter of the
current financial year, 2016-17, were 4 per cent lower y-o-y, on account of lower oil and copper prices, lower volumes at Zinc and Cairn India, partially offset by ramp-ups in volume from the Power business.
EBITDA was up 8 per cent on account of higher metal prices, improved cost efficiencies at aluminium business, lower discount to Brent, ramp up of volumes in the power business, partially offset by lower volumes from Zinc India as per the mine plans and lower oil prices, it said.
"Depreciation was at similar levels y-o-y. Higher depreciation on account of capitalisation of new capacities at the aluminium and power businesses, was partially offset by lower depreciation charge at Cairn India due to lower volumes, and closure of the Lisheen mine in Q3 FY2016," it said.
As on September 30, 2016, gross debt marginally increased by Rs 275 crore during the quarter under review to Rs 66,794 crore. Net debt reduced by Rs 2,259 crore to Rs 11,961 crore on account of positive free cash flow.
On the merger of Vedanta Ltd and Cairn India Ltd, the mining major said that it is expected to be completed by the first quarter next year.
It said: "Shareholders of Vedanta Resources Plc, Vedanta Ltd and Cairn India Ltd and the secured and unsecured creditors of Vedanta Ltd have approved the Scheme with requisite majority. The Scheme is now subject to the approval of the jurisdictional High Courts and other regulatory approvals."
The company said that the its board declared an interim dividend of Rs 1.75 per share. The board is expected to announce a dividend policy at Vedanta Ltd this fiscal year following completion of the merger with Cairn India.
