Lower zinc production and a decline in Zambian copper output weighed on Vedanta Resources Plc’s core quarterly earnings, sending the miner’s shares down more than 3%.
Vedanta, controlled by one-time scrap metal dealer Anil Agarwal, ground out a marginal increase in first-quarter core earnings due largely to its oil and gas, aluminium and non-Zambian copper operations.
But the company’s Zambian copper business, which accounts for about 10% of revenue, reported a 43% fall in core earnings, which Vedanta attributed to weak prices and lower production in the period.
Vedanta bought a controlling stake in Zambia’s Konkola Copper Mines (KCM) a decade ago. The business, intended to be part of a push beyond the company’s origins in India, has repeatedly disappointed.
Core earnings at Vedanta’s zinc business also fell.
Vedanta said its earnings before interest, tax, depreciation and amortisation (Ebitda) rose to $1.04-billion for the quarter ended June 30 from $1.03-billion a year earlier.
Citi analyst Jatinder Goel said Ebitda was 10% below his forecast of $1.16-billion.
Other divisions performed better than Zambia. Overall, core earnings at Vedanta’s copper business, which includes assets in India and Australia and was the company’s biggest money earner last year, rose 16 % to $61.2-million.
Cairn India Ltd, Vedanta’s oil and gas unit, recorded a 1% increase in Ebitda for the quarter. Last year, it generated about a quarter of the company’s overall revenue.
Vedanta’s aluminium business posted a 74% increase in Ebitda, helped by higher prices and lower production costs on account of the depreciation in the Indian rupee.
Vedanta reiterated plans to restart iron ore production in the western Indian state of Goa in the second half of the current financial year. A ban on mining in Goa, imposed in 2012 to curb illegal mining, was lifted in April.
Vedanta’s shares were down 2.8% at 1063 pence at 0821 GMT, ranking them among the biggest %age losers on the FTSE-250.
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