By Alex MacDonald
LONDON--India-focused Vedanta Resources PLC (VED.LN) Friday said
its earnings fell by more than a third in its first fiscal quarter,
compared with the same period a year earlier, largely due to
plummeting oil prices and weaker prices for other commodities.
The U.K.-listed miner, India's largest natural resources
company, reported a 38% drop in earnings before interest, taxes,
depreciation and amortization to $645 million for the first three
months of the fiscal year ending March 31, 2016. This stems from a
4% drop in revenue to $2.95 billion over the same period.
Vedanta's earnings were hit by tumbling oil prices, which caused
Ebitda from its majority-owned Cairn India unit to fall 61% to $215
million during the period. Oil and gas are typically the company's
biggest earnings contributor, but this quarter they were the
second-biggest contributor after its Indian Zinc operations.
Vedanta is in the process of seeking shareholder approval to
combine two of India's biggest resources companies--Cairn India Ltd
and Vedanta Ltd.--into one operating company. However, it has faced
some objections from Cairn Energy PLC (CNE.LN) in terms of
valuation, according to a person familiar with the matter.
"In Q1 [first quarter] we saw continued volatility in commodity
prices, but Zinc has held up quite well in view of its strong
fundamentals and is now the largest contributor to our Ebitda,"
said Tom Albanese, Vedanta's chief executive officer.
Zinc accounted for 45% of the company's first-quarter Ebitda,
rising 9% year-over-year in the fiscal first quarter to $293
million, largely as a result of a 33% increased in output from its
Indian zinc operations.
Vedanta restarted iron-ore sales from the Indian state of
Karnataka and said it's well positioned to re-start mining in the
Indian state of Goa post monsoon season.
Write to Alex MacDonald at alex.macdonald@wsj.com
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