Vedanta Resources Plc, a producer of oil and metals in India, reported a loss for the fiscal first half on foreign-exchange costs.
The net loss was $217 million in the six months through September compared with a profit of $173.6 million a year earlier, the London-based company said today in a statement. Sales declined 17 percent to $6.2 billion. Vedanta recommended an interim dividend of 22 cents a share, up 5 percent.
Vedanta, mainly a mine operator that’s led by billionaire Anil Agarwal, gained access to India’s biggest onshore oilfield after completing the purchase of a controlling stake in Cairn India Ltd. in 2011 for $8.67 billion.
“Despite the weaker commodity price environment in the period, the strength of our diversified portfolio and high margins in our oil and gas business” helps to improve overall margin performance, Vedanta said. Cairn India’s earnings before interest, tax, depreciation and amortization reached $1.12 billion, the company said.
Vedanta’s free cash flow in the period was $1 billion and free cash flow after investment was $400 million, it said. The company reduced its net debt by $153 million to $8.46 billion at the end of September, while gross debt was $16.6 billion, it said. Losses on foreign currency borrowings were $429 million.
“Constrained capital expenditure across the resources industry should limit growth in supplies thus provide fundamental support for prices in the coming years,” it said.
Vedanta expects to start iron ore mining in Karnataka “shortly,” after a Supreme Court ruling lifting restrictions. The court has allowed the sale of inventory and ordered the creation of a committee to determine the amount of mining to be permitted in the state of Goa, Vedanta said.
The company, seeking to resolve issues over declining output and increasing costs at the copper operations of its Konkola Copper Mines Plc unit in Zambia, has “engaged with various stakeholders, including the Zambian government.”
Zambia last week canceled the work permit of Konkola’s Chief Executive Officer Kishore Kumar after the company said it would dismiss 1,529 workers.
President Michael Sata earlier said the government would cancel the company’s license if it fired any workers. Fackson Shamenda, the labor minister, said Kumar told him that the president’s remarks were “mere rhetoric,” the state-owned Daily Mail reported on Nov. 8. Konkola on Nov. 11 apologized to the president for the published remarks.
Vedanta lowered its forecast for Zambian copper output to 140,000 metric tons this fiscal year on a slower ramp up at Konkola. It maintained the production cost at $2.30 a pound.