Vedanta (VEDL) Q4 19/20 earnings summary

Executive summary

• FY2020 results reflected subdued commodity prices, lower Zinc India and Oil & Gas volumes, and COVID-19 disruption; aluminium, Gamsberg, Karnataka iron ore and steel volumes partly offset the pressure.

• Adjusted EBITDA margin was 29%; free cash flow remained positive at ₹7,130 crore, while exceptional impairments drove a reported attributable loss of ₹6,664 crore.

Financial highlights

• Consolidated revenue was ₹83,545 crore, down 8% YoY; EBITDA was ₹21,061 crore, down 12% YoY, with adjusted EBITDA margin of 29% versus 30%.

• Attributable PAT before exceptional items was ₹3,995 crore, down 42% YoY; reported attributable PAT was a loss of ₹6,664 crore versus profit of ₹7,065 crore.

• Exceptional items included impairment of ₹17,080 crore, mainly across Oil & Gas, copper, iron ore and AvanStrate; consolidated net exceptional loss was ₹17,386 crore.

• Free cash flow post-capex was ₹7,130 crore versus ₹11,553 crore; lower EBITDA and COVID-related working-capital blockage were partly offset by savings and lower capex and tax outflows.

Outlook and guidance

• Planned investment of ~US$9 billion across businesses over the next 3–5 years, with revenue growth targeted at 30%–40%; delivery remains subject to COVID-19 and economic uncertainty.

• Oil & Gas priorities include commissioning additional gas processing and liquid-handling capacity, advancing exploration blocks and growth projects, and targeting higher recovery from producing fields.

• Aluminium priorities include stable production, lower costs, improving value-added product mix and operationalising the Jamkhani coal block, targeted for Q4 FY2021.

• Zinc India targeted production ramp-up, cost of production below US$1,000/t and further exploration; Zinc International planned Gamsberg debottlenecking and cost reduction toward below US$1,000/t.