TLDR:
- Vedanta’s Q1 profit slumps by 41% due to soft metal prices.
- Aluminium prices drop by 47% from last year’s record high, while zinc prices fall by 37% from their peak.
- Total aluminium sales and production rise by 2% in the first quarter.
- Quarterly revenue from operations falls by 12.8%, with the mainstay aluminium business contributing 35.7% of revenue.
- Vedanta approves 13.05 billion rupees for capital expenditure in the Sijimali bauxite block, with mining expected to begin in Q3 of FY2025.
- Company shares close 6.2% higher ahead of the results.
- Hindustan Zinc, a Vedanta Group-owned company, also reports a decline in Q1 profit due to weak zinc and lead prices.
Vedanta, led by billionaire Anil Agarwal, announced a significant 41% decline in consolidated profit after tax for the three months ending June 30. The profit dwindled to 33.08 billion rupees ($403.55 million) compared to 55.92 billion rupees in the same period last year, according to a statement released by the company.
The drop in profit comes as aluminum prices witnessed a staggering 47% fall from their record high in March of the previous year, while zinc prices also plunged by about 37% since their peak in August.
Despite these challenges, Vedanta reported a slight rise of 2% in total aluminum sales during the first quarter, matching a similar increase in metal production during the same period.
However, the company’s quarterly revenue from operations experienced a notable decline of 12.8%, amounting to 333.42 billion rupees. Additionally, the share of the revenue from its mainstay aluminum business contracted to 35.7%, down from 38% compared to a year ago.
On a separate note, Vedanta granted approval for a capital expenditure of 13.05 billion rupees for the Sijimali bauxite block, which was secured through a government auction in the eastern Indian state of Odisha. The estimated reserves of the bauxite block are approximately 311 million tonnes, and mining activities are anticipated to commence in the third quarter of the financial year 2025.
Vedanta’s shares closed 6.2% higher in anticipation of the results.
Earlier on the same day, Hindustan Zinc, a company under the ownership of Vedanta Group, also reported a decline in first-quarter profit, citing weak zinc and lead prices.
