Vedanta (VEDL) Q4 14/15 earnings summary

Executive summary

• FY 2014-15 revenue was ₹73,364 Cr, EBITDA ₹22,226 Cr at a 41% margin, and attributable pre-exceptional PAT ₹5,060 Cr.

• Consolidated net loss was ₹15,645.77 Cr after ₹22,128.93 Cr in exceptional items, led by non-cash oil and gas goodwill impairment.

• Record Zinc India mined metal, aluminium and alumina production, and record copper cathode output supported operations amid weak commodity markets.

Financial highlights

• Revenue increased 1% YoY to ₹73,364 Cr; higher copper volumes, aluminium ramp-up, TSPL Unit I and Karnataka iron ore sales partly offset weaker prices.

• EBITDA declined 13% YoY to ₹22,226 Cr, pressured by lower volumes and prices, higher exploration costs, royalties and coal costs.

• Attributable pre-exceptional PAT was ₹5,060 Cr versus ₹5,172 Cr; pre-exceptional EPS was ₹17.07 versus ₹17.44.

• Consolidated net loss was ₹15,645.77 Cr versus profit of ₹6,298.51 Cr; reported EPS was -₹52.77 versus ₹21.46.

• Free cash flow after capex was ₹3,425 Cr; cash, cash equivalents and liquid investments totaled ₹46,212 Cr at year-end.

Outlook and guidance

• FY 2015-16 oil and gas production is expected to rise; capex was cut from US$1.2bn to US$0.5bn, with spending focused on viable projects and core fields.

• Raageshwari Deep Gas production is expected to increase from 16 mmscfd to 25 mmscfd in FY 2015-16; the 100 mmscfd development plan is under execution planning.

• Zinc India expects higher mined metal and significantly higher refined metal production in FY 2015-16; cost of production excluding royalty is expected to remain stable.

• Zinc International FY 2015-16 production guidance is 220–230 kt, with unit costs of US$1,450–1,500/t; Lisheen is scheduled to close mid-year.

• Aluminium and power capacity ramp-ups, Goa iron ore restart, domestic bauxite sourcing and continued deleveraging are key FY 2015-16 priorities.