Vedanta Logs Robust Earnings, Beats Falling Commodity Prices

Panaji: In spite of falling commodity prices, Vedanta Ltd, formerly known as Sesa Sterlite, has come out with robust results in a volatile market helped by cost control and higher productivity, the company said on Wednesday.

"Vedanta has produced robust results in a volatile market with relentless focus on cost discipline and improved productivity, leading to strong earnings and record cash flow," Chairman Navin Agarwal said while addressing 51st annual general meeting of Vedanta Ltd in Goa.

"This year was challenging for the sector with falling commodity prices. However... the company continued to build upon its core strengths of low cost, scalable operations, development projects and superior growth options."

During 2015-16, driven by open and capex optimisation, Vedanta generated free cash flow of over Rs 11,000 crore, around three times higher than last year, he said, adding that this helped the company reduce net debt by over Rs 6,000 crore.

"The liquidity for the group remains strong with over Rs 52,000 crore of cash and cash equivalents," Agarwal said. Vedanta has consistently been one of the largest contributors to the exchequer, contributing Rs 20,600 crore in 2015-16, he said.

The chairman said the subsidiary, Hindustan Zinc, announced a historic dividend of over Rs 12,000 crore, of which around Rs 6,500 crore flowed to Vedanta Limited and approximately Rs 5,000 crore to the Indian government.

"This is one of the highest dividends ever paid by any private sector company in India," he said.

Agarwal said that during the year, Vedanta strengthened its ability to withstand volatility with record production and capacity ramp-up.

"Zinc, lead, aluminium, power and copper achieved record production," he added.

During the year, Vedanta increased capacity of BALCO and its well-invested aluminium smelting plants in Jharsuguda. "We also continue to work towards a phased ramp-up of the alumina refining capacity at the Lanjigarh alumina refinery," the chairman said.

In a major achievement, Mr Agarwal said, the entire power portfolio of 9,000 mw became operational during the year, making the company one of the largest power producers in India.

On Hindustan Zinc, he said the company posted record production during the year. "It continues to work on its next phase of growth enhancing capacity of zinc to 1.2 million tonnes per annum and silver to 500 tonnes," he stated.

Referring to Gamsberg zinc project in South Africa, he said "given strong fundamentals for zinc and our ramp-up plan, we expect the first ore production in 2018 at an optimized capex of USD 400 million".

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