Vedanta Declines as Earnings, Copper Production Miss Estimates

Vedanta Resources Plc (VED), an India-focused metals and oil company, fell the most in more than two months in London trading after quarterly earnings and copper production missed analyst estimates.

Vedanta slumped as much as 5.9 percent, the biggest intraday decline since Nov. 15. The company reported earnings before interest, tax, depreciation and amortization of $1.14 billion for the three months through December, compared with $1.11 billion a year earlier.

Ebitda missed estimates by 3 percent, Roger Bell, a London-based analyst at JPMorgan Chase & Co., wrote in a note. The bank will reduce its full-year estimates by 1 percent for Ebitda and 8 percent for earnings per share, he said.

Vedanta has suffered from lower copper output in Zambia and climbing costs at its Konkola Copper Mines unit in the country. Copper accounted for more than a quarter of revenue at the company last year, making it Vedanta’s biggest unit by sales.

The shares fell 4.6 percent to 799 pence as of 11:14 a.m. London time, valuing the company at 2.14 billion pounds ($3.5 billion).

Copper output at Konkola declined 24 percent in the quarter to 31,000 metric tons, Vedanta said today in a statement. The company expects to produce 130,000 to 135,000 tons of the metal in Zambia this year, it said, lowering its 140,000-ton forecast from November as it overhauls the operation to raise efficiency.

Vedanta released a “slightly soft third-quarter trading update this morning, with underwhelming Zambian copper production,” JPMorgan’s Bell said.

The company also produces zinc, aluminum and energy. Quarterly gross operated oil and gas output rose 10 percent from a year earlier to average 224,493 barrels of oil equivalent a day, driven by increased volumes from Rajasthan state, where the company taps India’s biggest onshore oilfield.

Output of refined zinc in India jumped 17 percent to 196,000 tons, Vedanta said. Aluminum production rose 1 percent to 199,000 tons.

To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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