With Vedanta 's (VED) $7.3bn (£5bn) debt pile now greater than its equity, investors in the resources group may well question maintenance of the final dividend, particularly after the board canned the interim payout. To fund the $81m capital return - described by chairman Anil Agarwal as a "prudent decision" - the company has relied on the recent record special dividend from Hindustan Zinc, in which the Vedanta group owns a majority stake.
Elsewhere, business continues to be tough. Low commodity prices again weighed on revenues, and contributed to a 38 per cent fall in cash profits to $2.3bn. And despite falling capital expenditure and a working capital inflow of $136m in the second half of the year, debts fell only marginally. Vedanta's dismal health and safety record - which chief executive Tom Albanese sought to address when he joined in 2014 - again resulted in the death of 12 workers in the year.
Analysts at Credit Suisse are forecasting an adjusted pre-tax profit of $563m and a loss per share of 94¢ in the year to March 2017, against $224m and a loss per share of $1.67 in FY2016.
VEDANTA RESOURCES (VED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 377p | MARKET VALUE: | £1.02bn | |
| TOUCH: | 377-379p | 12-MONTH HIGH: | 695p | LOW: 196p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | NA | |
| NET ASSET VALUE: | 2,544¢ | NET DEBT: | 107% | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 14.00 | 1.80 | 22.0 | 55 |
| 2013 | 14.60 | 1.70 | 59.0 | 58 |
| 2014 | 12.90 | 1.10 | -72.0 | 61 |
| 2015 | 12.88 | -5.64 | -655 | 63 |
| 2016 | 10.74 | -4.98 | -666 | 30 |
| % change | -17 | - | - | -52 |
Ex-div: 7 Jul Payment: 12 Aug £1 = $1.44 | ||||
