Despite a decent step-up in revenues, Vedanta Resources (VED) recorded a 6 per cent fall in interim operating profits to $986m (£620m). That's because of lower volumes at Zinc India, softening Brent crude prices, and a higher share of petroleum profits payable to the Indian government.
The group's net share of oil and gas production declined slightly during the period to 23.9m barrels, which was commendable given a busy maintenance programme. Energy receipts were also hit by the suspension of gas sales from the Ravva plant, due to unexpected remedial work on the Andhra Pradesh pipeline. The good news is that normal production levels have been restored at the Mangala Processing Terminal in Rajasthan, following successful maintenance work, which should help drive output during the second half.
Prospects for Vedanta were buoyed by the rise to power of Narendra Modi earlier this year; a pro-business, anti-interventionist prime minister is seen as a rarity in Indian politics. After interminable delays, it now seems more likely that Vedanta will receive the necessary approvals to resume iron-ore mining in the Indian state of Goa.
JPMorgan Cazenove expects 2015 EPS of 67¢.
| VEDANTA RESOURCES (VED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 798p | MARKET VALUE: | £2.1bn | |
| TOUCH: | 797p-798p | 12-MONTH HIGH: | 1,201p | LOW: 748p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 1,329¢ | NET DEBT: | 54% | |
| Half-year to 30 Sept | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 6.1 | 261 | -79.4 | 22 |
| 2014 | 6.5 | 640 | -4.7 | 23 |
| % change | +6 | +145 | - | +5 |
| £1 = $1.59 | ||||
