Vedanta first quarter profit rises 18% on higher output

Vedanta Resources plc, India's largest producer of copper and zinc, said first-quarter earnings gained 18% on increased metal prices and production. Earnings before interest, tax, depreciation and amortisation rose to US$695.4 million in the three months ended June 30, from US$589 million a year earlier, the London-based company said on Thursday in a statement. Sales revenue rose 42% to US$1.85 billion, with the company benefiting from higher metals prices. Copper, aluminum and zinc prices gained in the quarter, buoyed by the burgeoning demand from Asia. Prices of copper for immediate delivery on the London Metal Exchange averaged US$7,645/t in the quarter, 5.2% more than a year earlier. Aluminium rose 4.2% to an average of US$2,766 and zinc added 12% to US$3,685. India's gross domestic product has expanded at a record 8.6% average pace since 2003, faster than any other major economy except China. Production of aluminium rose 28% to 97,000 t, Vedanta said, and zinc increased 13% to 93,000 t. Production of copper cathode, a finished form of the metal, rose 42% to 81,000 t at Vedanta's Indian units. Copper output in Zambia was unchanged at 39,000 t, the company said. Vedanta's earnings (ebitda) from its Indian copper smelter fell 28% to US$71.6 million because the plant received lower processing fees. Smelters have been forced to cut the fees they can impose on miners to turn their ore into metal because of fierce competition for concentrate. These charges will decline further, the company said. The Lanjigarh alumina refinery in India started production with outsourced bauxite, with annual capacity at 1.4 Mt, Vedanta said. The company still needs environmental clearances from the Supreme Court before it can develop its own mine in the area. A hearing is scheduled for next month. Vedanta bought a 51% stake in Sesa Goa Ltd, India's biggest non-state iron-ore exporter, for US$81 million in April.