Despite improved margins, Vedanta Resources (VED) reported a 9 per cent dip in full-year cash profits to $4.5bn (£2.7bn). Reflecting lower copper and zinc production as well as weakening commodity prices, the numbers were in line with forecasts. But investors might feel disappointed that the group didn’t provide guidance for long-term costs and production at its troubled Konkola Copper business (KCM) in Zambia.
The decline in production was primarily due to the temporary suspension of operations at the Chingola open pit copper mine, which is part of KCM. But Vedanta also had to contend with an iron-ore mining ban in Goa. The Goan ban was lifted by India’s Supreme Court after the March year-end - albeit with an interim tonnage restriction - but Vedanta is still working towards securing licensing approval to resume operations.
Vedanta’s new chief executive, ex-Rio Tinto (RIO) boss Tom Albanese, can at least take heart from the performance of the group’s energy division Cairn India, where daily production was up 7 per cent. A successful exploration programme in Rajasthan also added over a billion barrels to the division’s 'oil-in-place resource' - a broad measure of potentially exploitable resources - during the period.
Broker JP Morgan expects adjusted EPS of 46¢ this year.
| VEDANTA RESOURCES (VED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 966p | MARKET VALUE: | £2.6bn | |
| TOUCH: | 966-968p | 12-MONTH HIGH: | 1,352p | LOW: 748p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 1,501¢ | NET DEBT: | 44% | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 7.9 | 1.8 | 220 | 45.0 |
| 2011 | 11.4 | 2.7 | 283 | 52.5 |
| 2012 | 14.0 | 1.8 | 22 | 55.0 |
| 2013 | 14.6 | 1.7 | 59 | 58.0 |
| 2014 | 12.9 | 1.1 | -72 | 61.0 |
| % change | -12 | -35 | - | +5 |
Ex-div: 9 Jul Payment: 8 Aug £1 = $1.68 | ||||
