LONDON - Copper and aluminium producer Vedanta Resources PLC (Nachrichten) said its full-year results more than doubled, exceeding market expectations, on higher production and metal prices.
Earnings before interest, tax, depreciation and amortisation jumped to a record 2.703 bln usd in the year to end March, from 1.102 bln last year, as sales rose 76 pct to 6.502 bln usd. The EBITDA margin grew to 41.6 pct from 29.8 pct.
According to a consensus forecast of nine analysts, EBITDA was expected to rise to 2.660 bln usd and sales to 6.337 bln usd.
'Global demand for metals continues to be strong on the back of strong consumption from China, India and other emerging markets, supported by increased activity from industrial and infrastructure sectors,' said chairman Anil Agarwal. 'Economic and industrial growth in India will continue to drive double digit growth in our commodities,' he added.
Revenues for the aluminium and zinc businesses more than doubled. Aluminium production rose 67 pct to 351,000 tonnes helped by output from the new Korba smelter, which produced 208,000 tonnes, and in zinc mined production leading to additional sales of zinc and lead concentrate. Sales from its copper business rose 59 pct and accounts for 55 pct of the group's total revenue but only 31 pct of its EBITDA.
The group anticipates metal production increasing across all its operations in 2008, as a result of full capacity utilisation of the expansion and debottlenecking initiatives, and expects unit costs to fall.
On a conference call, chief executive Kuldip Kaura declined to give production forecasts for the current year but did say the overall outlook for the group was 'very positive'.
Operating costs for 2007 rose at its copper operation in Zambia, but were stable elsewhere despite industry cost pressures.
Copper cathode output from Zambia fell 13 pct to 142,000 tonnes and unit costs grew 36 pct.
'Production at our Konkola operations fell short of our expectations in FY 2007,' the company said, adding that it is taking measures to improve plant reliability. It expects to reach production levels equivalent to 200,000 tonnes a year in 2008.
Unit costs at Zambia, which were 173.6 cents a pound, could fall to 125-130 if the measures taken at Konkola are successful and production reaches 200,000 tonnes, Kaura said.
Production of copper cathodes at its Indian operations was 313,000 tonnes, an increase of 14.7 pct on 2006, mainly due to de-bottlenecking of its Tuticorin smelter.
The diversified mining company - whose principal operations are in India, Australia and Zambia - plans to pay a final dividend of 20 cents, up from 14.3 cents last year, raising its full-year dividend to 35 cents.
On the Sterlite Gold operations in Armenia, which have been suspended since the last quarter of FY 2007, the company said it is continuing to negotiate with the Armenian government to resolve issues related to the implementation agreement, but added it is also 'evaluating our options to exit this business if our negotiations do not prove fruitful.'
The group is implementing a 7.5 bln usd organic growth programme. The 2.2 bln usd expansion programme announced at the time of its IPO in December 2003 in aluminium, zinc and copper pipeline is now almost complete, it said. While the 5.3 bln usd next phase of its expansion is underway and on schedule.
Concerning the zinc operations, Kaura said the Chanderiya hydro smelter project had been accelerated and that commissioning of the smelter is now expected to take place by the end of this year rather than in early 2008.
Vedanta said it is still in talks with the Indian government to buy the state's 49 pct stake in Bharat Aluminium Co Ltd (BALCO) and expects to complete the transaction in the next few months. It also plans to exercise its option to acquire the government's 29.5 pct interest in Hindustan Zinc Ltd, which became due for exercise after April 11, and that its efforts to buy out Zamb
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