Low commodity prices and ban imposed on Iron ore mining in Karnataka and Goa causes a loss of USD 217 million to Vedanta.
The London-listed company had recorded a profit of USD 173.6 million during H1 of FY13.
Depreciating INR resulted in foreign exchange loss of USD 429 million. The company’s profit before EBITDA had declined 14% to about USD 2.2 billion from USD 2.5 billion in the corresponding year. On the contrary, “Our EBITDA margins remain strong at 44.5 % in the first half, demonstrating the resilience of our low-cost diversified portfolio,” said, Anil Agarwal, Chairman of Vedanta.
The major factor behind the loss for the company was mainly a 14% decline in commodity prices. In addition, 52% increase in net interest expenses of about USD 358 million and USD 428 million of foreign exchange loss has added to the performance.
Vedanta’s performance was affected majorly due to the following reasons:
- Paid high shares of profit from petroleum to Indian Government
- Ban imposed on mining in Goa and Karnataka
- Low volume gains in Konkola Copper Mines based in Zambia
The company expects to resume its mining operations in Karnataka soon. It is waiting for final statutory clearance to restart its mines located in Chitradurga District of the state.
Supreme Court has recently allowed auction of Iron ore in Goa. It has also set a committee to restrict the quantity being auctioned from the province.