Cairn deal boosts miner Vedanta's core profit
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India-focused miner Vedanta posted a 13 per cent rise in full-year core profit, as its zinc operations and recently acquired oil producer Cairn India helped offset the impact of a regional mining ban on its key iron ore operations.
The London-listed miner is in the throes of a simplification of its byzantine structure, which will see it place all but one of its subsidiaries under the umbrella of a single operating unit. The company said it was on track to complete the overhaul by the end of the calendar year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to just above $4 billion, in line with analyst expectations, though its core profit margin, excluding custom smelting, dipped to 40.6 percent from 44.6 percent.
London-listed Vedanta took a majority stake in Cairn India late last year in an $8.7 billion deal, buying most of the stake from Cairn Energy. Core profit from Cairn - $713 million - accounted for the bulk of the group-level increase.
Underlying attributable profit after tax, however, fell 46 per cent due to lower attributable profit from subsidiaries and higher interest costs after the Cairn deal, but again met forecasts at just over $387 million.
Vedanta last month posted a drop in its full-year iron ore output, hit by a ban on mining in the southern Indian state of Karnataka and logistical bottlenecks in nearby Goa that dented one of its key profit contributors.
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