Indian mining group Vedanta on Thursday reported a 27% drop in fourth-quarter profit, due to falling prices of major metals such as aluminum and zinc, as well as rising financial costs.
The oil-metals conglomerate, led by billionaire Anil Agarwal, posted consolidated net profit of 13.69 billion rupees (about $164 million), below analysts’ estimates of 21.10 billion rupees, according to LSEG data.
The company also saw an increase in expenses, with financial costs increasing by almost 34%.
Domestic zinc and aluminum prices remained weak during the January-March period as global prices of the metals remained subdued due to concerns over demand from major consumer China, amid slow economic recovery and struggling real estate market in Asia’s largest economy.
The largest decline in revenue was recorded in the zinc and lead vertical – the second largest segment – which fell 16%, leading to a 6% decline in total revenue. the company.
Revenues from the aluminum and copper businesses – which are the largest and third largest contributors to revenue – also fell 1.5% and 1.8%, respectively.
The drop in profits comes as the natural resources giant is planning an overhaul of its business to unlock greater value for shareholders, after experiencing a series of factory closures and profit cuts.
The company’s investors are currently focusing on the conglomerate’s major growth and expansion plans, while helping its holding company, Vedanta Resources, reduce its significant debt.
Hindustan Zinc unit’s net profit fell 21% in the quarter due to lower zinc prices, the company said last week. ($1 = 83.3050 Indian rupees) (Reporting by Manvi Pant in Bengaluru; Editing by Sohini Goswami)
