Vedanta revenues soar on higher commodity prices

Vedanta Resources announced record earnings on Wednesday for the quarter ending 30 June thanks to significantly higher commodity prices and increased sales volumes.

The $777.8m EBITDA the group posted was a 48% increase on the $527.1m it had shown the same time last year and helped Vedanta to decrease its gross debt position 8%, from $18.2bn at 31 March to $16.8bn at the end of the first quarter.

Revenues increased across most of the business.

Oil and gas reported a 25% revenue increase to $353.1m despite barrels of oil equivalent per day seeing a 5% decrease in average gross production.

Vedanta's Indian based zinc operations accounted for $694.6m of its total revenue with a very impressive 90% year-on-year increase with two more mines becoming operational at Sindesar Khurd and Zawar by July 2019.

Revenue of $657.2m represented a 60% increase in the company's aluminium business.

The first of the two dark spots was the report that iron ore revenue had dipped 26% from the $145m Vedanta announced last year to $106.6m in 2017, mainly due to a lower realization than expected at its Goa mine site, the second coming in the form of a 36% decline in power revenue as a result of a fire in April at the took a Punjabi power station operated by its wholly owned subsidiary, Talwandi Sabo, offline for most of the quarter.

Former Rio Tinto boss turned Vedanta chief executive, Tom Albanese said, "We have made a positive start to the year with both revenue and EBITDA significantly up year on year. In particular, our Zinc and Oil & Gas businesses have delivered a strong quarter."

He also noted, "Our recent comprehensive refinancing exercise of $1.84 billion further helps to optimise our balance sheet and create value for all our stakeholders."

As of 0835 BST, shares had seen a slight uptick, sighting 1.04% higher at 785.00p.