Mining group Vedanta Resources Plc (VED.L) Wednesday posted a strong growth in its third-quarter revenues and EBITDA, helped by higher volumes, efficient cost management and recovering commodity prices, and said production increased in all of its segments.
Total revenues for the quarter surged 64.2% to $2.14 billion from $1.31 billion in the prior year. Total EBITDA significantly grew to $662.5 million from $10.1 million in the previous year.
In its Zinc business, the company said it achieved the highest ever zinc and lead mined metal production of 200 thousand tonnes. The company noted that refined zinc and lead metal production was stable at 169 thousand tonnes. Sales during the quarter increased by 41 thousand dry metric tonnes of surplus zinc concentrate. According to the company, EBITDA in its Zinc business increased over 6 times to $290.6 million from $44.3 million in the prior-year quarter, supported by the favorable impact of higher LME prices, increased production volume and operational efficiencies. But these were partially offset by a decline in by-product realizations and also due to the settlement of a long term wage agreement effective from July 1, 2007. In the iron ore segment, the company said production during the third quarter increased 36% to 5.39 million tonnes from 3.98 million tonnes last year, helped by higher volumes due to the Dempo acquisition. Iron Ore sales for the quarter were up by 25% at 6.79 million tonnes. EBITDA was $216.1 million, compared to $85.8 million in the same quarter a year ago, due to higher volumes and improved realizations. In the Copper - India/Australia business, the company noted that copper cathode production at Tuticorin smelter improved 12% to 85 thousand tonnes from 76 thousand tonnes produced in the same quarter a year ago. However, production volumes were marginally impacted by lower concentrate grades. Vedanta expects the production volumes to improve to normal levels during the fourth quarter. During the third quarter, mined metal production at Australian Mine was 4 thousand tonnes. EBITDA in the segment increased to $39.3 million from $22.3 million in the comparable quarter a year ago. In the Copper - Zambia Business, the company said its quarterly KCM production was 42 thousand tonnes of copper cathodes, up from 25 thousand tonnes produced in the corresponding quarter in the previous year. Mine output also improved 10% to 22 thousand tonnes. Vedanta said that copper business was helped by improved volumes, higher copper prices, and lower operating cost, but was partially offset by loss on metal price hedges. During the quarter, EBITDA in the segment was $35.6 million, compared to a loss of $159.4 million in the preceding-year period. In the company's Aluminium business, production during the quarter increased 6.6% to 130 thousand tonnes from 122 thousand tonnes a year ago. According to the company, Lanjigarh alumina refinery produced 181 thousand tonnes of alumina during the quarter, an increase of 10% from the same quarter a year ago. Revenues increased to $221.4 million from $183.2 million in the prior year. EBITDA from the business grew to $45.1 million from $13.1 million in the year earlier. In addition, the company noted that the first metal tapping from the 1.25 mtpa Jharsuguda II aluminium smelter project is expected in the first quarter of fiscal 2011 and the first metal tapping from the 325 ktpa aluminium smelter project at BALCO is expected during the third quarter of fiscal 2011. Silver production during the quarter increased 47.5% to 1.38 million ounces from 938 thousand ounces in the year earlier. In the Energy Business, Vedanta said it sold 589 million units of power during the third quarter, compared to 42 million units sold in the same quarter last year. Segment EBITDA for the quarter was $36.7 million, significantly up from $3.5 million in the preceding year. For the nine-month period, the company's Aluminium production increased 14.3% to 375 thousand tonnes from 328 thousand tonnes a year ago. In the Copper - Zambia business, the company said its KCM production for the period was 120 thousand tonnes of copper cathodes, up from 98 thousand tonnes produced in the corresponding period in the previous year. Silver production during the nine months increased 48.2% to 4.02 million ounces from 2.71 million ounces in the year earlier. Iron ore production during the period increased 22.5% to 13.6 million tonnes from 11.11 million tonnes last year. VED.L is currently trading at 2,492 pence, down 31 pence or 1.23%, on a volume of 613 thousand shares. In the past 52 weeks, the shares have been trading in a range of 492.75 pence-2,967 pence on the LSE.
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