There were subtle differences within the commentary adorning Vedanta Resources’ (VED) full-year numbers. Interim CEO Kuldip Kaura, who soon hands over to AngloGold Ashanti chief Srinivasan Venkat, highlighted a “robust performance creating a clear pathway for sustainable growth”. The tone was less measured from chairman Anil Agarwal, for whom this was “another excellent year…of real progress”.
Under Mr Agarwal, Vedanta wants to be all things to all people. The country's sole diversified resources group is “uniquely placed to help power India’s growth”, and “touched the lives of 3.4 million people” through its social programmes last year. But once again, worker safety serves as a painful footnote to all of this. Nine people died at Vedanta’s mines this year, bringing the fatality count to 123 this decade; adding to the disquiet, full-year results dropped on the day at least 11 people were killed protesting the expansion of a copper smelter in Tamil Nadu.
Consequently, it’s hard to single out the bigger cause of the 14 per cent results day share price drop. Financials weren’t “excellent”, or even encouraging. Cash profits grew at a slower rate than a top line buttressed by commodity prices and higher volumes, while capital expenditure blunted free cash flow. Despite this, analysts expect FY2019 pre-tax profits to climb to $3.03bn (£2.27bn), and adjusted EPS to more than double to 192¢.
| VEDANTA RESOURCES (VED) | ||||
| ORD PRICE: | 760p | MARKET VALUE: | £ 2.07bn | |
| TOUCH: | 759-760p | 12-MONTH HIGH: | 982p | LOW: 559p |
| DIVIDEND YIELD: | 6.4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | * | NET DEBT: | 147% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 12.9 | 1.10 | -72 | 61 |
| 2015 | 12.9 | -5.64 | -655 | 63 |
| 2016 | 10.7 | -4.98 | -666 | 30 |
| 2017 | 11.5 | 1.38 | -8.2 | 55 |
| 2018 † | 15.4 | 2.48 | 84.8 | 65 |
| % change | +33 | +80 | - | +18 |
| Ex-div: | 19 Jul | |||
| Payment: | 22 Aug | |||
| £1=$1.34. *Negative shareholder funds (total equity $6.5bn, non-controlling interests $6.9bn).Dividend conversion rate: $1 = £0.7431. | ||||
