Vedanta Q1 FY23 Results
Mumbai, July 28, 2022: Unaudited Consolidated Results for the First Quarter ended 30th June 2022.
Financial Highlights –
§ Consolidated Revenue of ₹38,251 crore, up 36%YoY
§ Achieved best-ever 1Q EBITDA of ₹10,741 crore, up 7%YoY
§ Strong Industry leading EBITDA margin1 of 32%
§ Profit after tax (PAT) at ₹5,592, up 6%YoY
§ Return on capital employed improved 780bps YoY to ~30%
§ Net Debt/EBITDA at 0.6x, maintained at low levels
§ Strong liquidity position with cash and cash equivalent at ₹34,342 crore
§ 1st interim dividend of ₹31.5/share
§ 2nd Interim dividend of ₹19.5/share declared in Jul’22, record YTD July’22 dividend yield of 15.4%*
Shareholder value creation –
Vedanta is focussed towards – a) sustaining & improving asset quality, b) delivering stable and reliable performance, and c) creating long term sustainable shareholder value. We remain committed to improve margins, increase free cash flow generation, and thereby increase shareholders’ returns. Vedanta continues to have one of the best dividend yield among peers. We have declared dividend of ₹31.50 per share in April 2022 and ₹19.50 per share in July 2022, which together translates into a record YTD July’22 dividend yield of 15.4%*. This is in line with strong operational outcomes, enabled by our efforts to improve productivity and efficiency through technology and digitalization.
Operational Highlights 1QFY23 –
§ Continued strong operating performance across key businesses
o Aluminium production at 565kt, up 3%YoY
o Alumina production at 485kt, up 1%YoY
§ Zinc India:
o Mined metal production at 252kt, up 14%YoY
o Highest ever 1Q refined metal production of 260kt, up 10%YoY
o Silver production at 177 tonnes, up 10%YoY
§ Zinc International:
o Record quarterly metal in concentrate production at Gamsberg of 53kt, up 14%YoY
§ Oil & Gas:
o Average gross operated production of 148 kboepd, down 10%YoY due to natural decline was largely offset by infill wells and gas production
§ Iron Ore:
o Production of saleable ore at Karnataka of 1.26 million tons, down 14%YoY
o Pig iron production of 189 kt, up 6%QoQ
o Continued engagement with the Stakeholders for resumption of Goa mining
o Saleable production at 269kt, down 7%YoY
o Hot metal capacity increased by 0.2 MTPA in 1QFY23
o Highest ever quarterly ore production of 140 kt, up 14%YoY
§ Copper India:
o Due legal process is being followed to achieve a sustainable restart of the operations
ESG Highlights –
§ Completed internal carbon pricing, climate risk assessment, scope -3 emission inventorization
§ Cairn signed contract to harness geothermal energy from its re-purposed Oil and Gas wells
§ Jharsuguda deployed India’s largest fleet of electric forklifts
§ India’s 1st Battery Electric Vehicle (BEV) in UG Mine introduced at HZL’s Zawar mine
§ Signed agreements with more cement companies to use High Volume Low Toxicity (HVLT) waste streams (Fly-ash; Red-Mud) as raw material
§ Indicator of industry leading people practices:
o Great place to work certified
o 29% women in decision making bodies
o Employed 9 transgender in workforce
Mr Sunil Duggal, Chief Executive Officer, Vedanta, said “I am pleased to report that we have started FY23 with strong performance, underpinned by our world class assets and strength of our business model. We recorded best-ever 1Q EBITDA of ₹10,741 crore and PAT of ₹5,592 crore despite inflationary cost pressures. This year, our key priorities will be delivery on committed volumes, timely execution of projects for growth, value addition, vertical integration & cost reduction across our key businesses, and proactive commodity price risk management. We are continuing work on our renewed ESG purpose of “Transforming for Good”. We have increased the number of women in decision-making bodies to 29% and are also among the few Indian companies that have actively recruited members from the transgender community as part of our workforce. I am also happy to inform that we will start reporting our Scope 3 emission from FY22 Sustainability report, three years before our stated timeline. We strongly believe in ‘Atmanirbhar Bharat Abhiyan’ to make India self-reliant. We are one of the highest contributors to the national exchequer. We are the only domestic private player contributing 25% of India’s Oil & Gas production.”
o 1QFY23 Revenue increased by 36%YoY to ₹38,251 crore; supported by higher sales volume across businesses, commodity prices and strategic hedging gains.
§ EBITDA and EBITDA Margin:
o 1QFY23 EBITDA increased by 7%YoY to ₹10,741 crore in line with improved operational performance, commodity prices and strategic hedging gains, was partially offset by higher cost of production amidst input commodity inflation.
o Strong EBITDA margin1 of 32% in 1QFY23.
§ Depreciation & Amortization:
o 1QFY23 Depreciation & amortisation increased by 16%YoY to ₹2,464 crore, mainly due to higher depletion charge in Oil & Gas and higher ore production at Zinc India.
§ Finance Cost:
o 1QFY23 Finance cost increased 2%YoY to ₹1,206 crore, mainly due to increase in average borrowings, partially offset by reduction in average interest rate of borrowings. Finance cost was down 10%QoQ due to onetime charges paid in 4QFY22 and lower average interest rate in 1QFY23, which was partially offset by increase in average borrowings.
§ Investment Income:
o 1QFY23 Investment Income decreased 20%YoY to ₹583 crore, mainly due to Mark to Market movement. It was up 12%QoQ due to change in Investment mix.
o 1QFY23 normalized Effective tax rate (ETR) was 23% compared to 27% (excluding tax on exceptional items of ₹81 crore) in 1QFY22 and 28% (excluding tax on exceptional items of ₹28 crore) in 4QFY22 on account of one-time impact of MAT (minimum alternate tax) Asset recognition of ₹505 crore.
§ Profit after Tax (PAT) and Earnings per Share (EPS):
o EPS for 1QFY23 was at ₹11.92 per share compared to ₹11.40 per share in 1QFY22.
o Gross debt increased by ₹8,031 crore in 1QFY23 to ₹61,140 crore as on 30th June 2022
o Net debt increased by ₹5,820 crore in 1QFY23 to ₹26,799 crore on 30th June 2022
o Cash and cash equivalents position remain strong at ₹34,342 crore. The Company follows a Board-approved investment policy and invests in high quality debt instruments with mutual funds, bonds, and fixed deposits with banks.
o The company has investment grade credit; rated ‘AA’ with stable outlook by both CRISIL and India Ratings.
Key Recognitions –
Vedanta has been consistently received various awards and accolades. Few recognitions received during 1QFY23 are:
§ VAL – J and BALCO awarded with ‘Excellence in Fly-ash Utilization’ awards for efficient management of fly-ash by both Thermal Power Plant and Captive Power Plant by ‘Mission Energy Foundation’
§ Cairn awarded with the ‘India Sustainability Award’ under ‘social performance’ category by the ‘India CSR Forum’
§ Hindustan Zinc’s Dariba Smelting complex and Zinc Smelter Debari won the coveted “Green Company Rating” by CII and Rajasthan State Pollution Control Board.
§ HZL’s Rampura Agucha Mine won 2 awards at Green Maple foundation pinnacle – Energy Conservation award and Water Conservation award
§ VAL – J awarded with ‘CSR Program of the Year Award’ at Odisha Business Leader of the Year Awards 2022
§ HZL awarded with ‘Master of Risk award in fraud prevention & ethics management’ at India Risk Management Awards
§ Vedanta’s Value-Added Business (VAB) conferred with prestigious IMC RBNQA performance excellence award in manufacturing category at IMC Chamber of commerce and Industry
§ HZL won “People First HR Excellence award 2022”
§ Cairn awarded with ‘Platinum Award in Occupational Health & Safety 2022 ‘by ‘Grow Care India’
§ Sterlite Copper won “Global HR Excellence Award 2022” for best use of HR practices in employee engagement at Best Employer Brand Award 2022
§ BALCO awarded with ‘Platinum Award for Safety’ at the CII National Safety Practices Competition