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Vedanta misses Q4 profit estimates, reduces debt: Key takeaways

The company had posted a net profit of Rs 2,615 cr in the corresponding quarter last year.

ETMarkets.com|
Last Updated: Jun 06, 2020, 05.17 PM IST
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Vedanta
Net sales also declined 16 per cent year-on-year to Rs 19,513 crore in Q4FY20 against Rs 23,092 crore in the same period last year.
Metals and mining major Vedanta posted a net loss of Rs 12,521 crore for the quarter ended March 31 on the back of exceptional loss of Rs 17,132 crore, due to impairment of assets in oil and gas, copper and iron ore business. Analysts in an ETNow poll had projected a net profit of Rs 795 crore.

The company had posted a net profit of Rs 2,615 crore in the corresponding quarter last year.

Net sales also declined 16 per cent year-on-year to Rs 19,513 crore in Q4FY20 against Rs 23,092 crore in the same period last year.

Here are the key takeaways from Vedanta’s Q4 earnings:

  • Reduction in net debt... The company’s net debt stood at Rs 21,273 crore on March 31, down by Rs 5,683 crore compared to a year ago.

  • Management commentary... “The covid pandemic has hit the world and us in the last quarter of the year. We have taken a pro-active approach to keeping our assets and people safe while ensuring optimum operations during these difficult times,” said Sunil Duggal, Chief Executive Officer.

  • EBITDA drops... EBITDA for Q4 FY2020 came in at Rs 4,844 crore, lower by 23% YoY, primarily due to lower commodity prices further impacted by COVID-19, lower volume zinc, oil & gas and steel business, partially offset by higher sales at iron ore business, improved cost of production at aluminium & steel business, lower input commodity prices and rupee depreciation.

  • Operational highlights... Production of zinc and oil & gas dropped while that of aluminum, iron ore and steel rose. The company said there was continued engagement with the government for resumption of Goa mining operations and said due legal process is being followed to achieve a sustainable restart of the Tuticorin operations.

  • Finance costs drop... Finance cost for Q4 FY2020 was at Rs 1,064 crore, down 14 per cent sequentially and 24 per cent YoY, primarily due to lower average borrowing cost in line with market trends and repayment of debt at various businesses.

  • Investment income declines... Investment income came in at Rs 611 crore, lower by 62 per cent YoY, primarily due to mark-to-market gain on a structured investment in Q4 FY2019, partially offset by an increase in income due to increase in average investment corpus.
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