Vedanta Q3FY23 Financial Results.
Unaudited Consolidated Results for the Third Quarter and nine months ended 31st December 2022.
§ Consolidated quarterly Revenue of ₹33,691 crore
§ Consolidated quarterly EBITDA of ₹7,100 crore with EBITDA margin of c.24%.
§ Consolidated Profit after tax grew 15%QoQ to ₹3,092 crore
§ Generated robust Free cash flow (pre capex) of ₹6,504 crore in 3QFY23
§ Continue to maintain strong double-digit return on capital employed ~23%
§ Net Debt/EBITDA of 0.96x, maintained at low level
§ Contributed to exchequer ~₹55,000 crore in 9MFY23
§ Proactive commodity hedging for risk management, recorded ~₹2,950 crore gain in 9MFY23
§ Highest dividend yield among peers; ₹81 per share YTDFY23 dividend including 4th interim dividend of ₹12.5/share
§ Continue to maintain healthy cash and cash equivalents of ₹23,474 crore as on 31st Dec 2022
Strategic initiative to unlock shareholder value – Sale of VZI business to HZL:
The Board has approved the sale of Vedanta Zinc International (VZI) business (Gamsberg, Black Mountain and Skorpion operations) to Hindustan Zinc Limited (HZL) for a cash consideration of US$ 2,981 mn, including $562 mn as deferred consideration linked to certain milestones. This is a win-win transaction and will unlock significant value for both Vedanta Limited and HZL shareholders. With combined R&R of ~1,150 mn tonnes Ore and 60+ mn tons Metal, HZL will have potential to become the largest global Zinc player. Vedanta will continue to participate in this growth story through Hindustan Zinc.
Key businesses continue to deliver steady operating performance:
o Successfully commissioned Plant heat exchanger, Compressor unit and FDS unit among other projects for Lanjigarh 5Mtpa expansion.
o Commissioned 120ktpa billet line in Jharsuguda; ramping up billet production capacity to 580ktpa.
o Quarterly Alumina production decreased by 2%QoQ to 443kt, due to maintenance activities in calciners.
o Highest ever 9M Aluminium production of 1,716 kt, up 1%YoY in line with ramp up at Jharsuguda; 3QFY23 Aluminium production decreased 3%QoQ to 566kt.
§ Zinc India
o Highest ever 9M mined metal production at 761kt, up 5%YoY with higher ore production, improved mined metal grades and operational efficiency; 3QFY23 production marginally decreased by 1%QoQ in line with mined metal grade.
o Highest ever 9M refined metal production, up 8%YoY to 762kt owing to better plant availability and consistent mined metal flow from mines; 3QFY23 production improved 5%QoQ to 257kt.
§ Zinc International
o 9M mined metal production grew 25%YoY to 210kt, in line with ramp-up at Gamsberg, further supported by higher zinc recoveries at Gamsberg and better lead grades at BMM; Gamsberg achieved highest ever 9M production at 159kt, up 27%YoY.
o Quarterly mined metal production in 3QFY23 stood at 69kt with 52kt production at Gamsberg.
§ Oil and Gas
o Average daily gross operated production of 145kboepd, increased 3%QoQ due to gains from exploration success in Ravva and gains from the infill well drilling campaign in Cambay, partially offset by natural decline.
§ Iron ore
o Karnataka saleable ore production increased by 32%QoQ to 1.4mn tonnes
o Pig iron production was higher by 66%QoQ as 2QFY23 was impacted by shut down in smaller blast furnace
o Saleable production of 306kt, lower by 6%QoQ due to maintenance activities in blast furnace
o Ore production increased 88%QoQ to 64kt as 2QFY23 was affected by heavy monsoon
o Ferro chrome production increased 70%QoQ to 19kt as there was planned maintenance shutdown in Q2FY23.
§ Copper India:
o Due legal process is being followed to achieve a sustainable restart of the operations
§ Significant improvement in ESG score of Vedanta Limited by various key external ESG rating agencies:
o Vedanta Limited ranked 6th among DJSI’s top 10 global diversified Metal & Mining peers and inducted into Dow Jones Sustainability Emerging Markets Index; Aluminium business ranked 2nd among Global Aluminium peers
o MSCI ESG risk rating improved from ‘CC’ in 2020 to ‘BB’ (above industry average),
o Sustainalytics ESG risk score improved by 4.5 points,
o CDP B rating for “Water security” on 1st time disclosures
§ Aluminium Business released its first ever TCFD report
§ Aluminium Business procured 390 million units of RE power
§ Balco launched Biofuel trial for ladle heating and heavy equipment
§ Highest ever quarterly Biomass firing at 22,806 tonnes
§ Improved HVLT usage to 98%
§ Water recycling at 34%
§ Introduced an industry-leading EV Policy for all our employees to drive increased adoption of EVs, aiding India’s green mobility push
§ 3,955 Nand Ghars (women and childcare centre) created for social welfare
§ Spent INR 216+ crore to uplift the quality of life of communities through various CSR initiatives; positively touching 3.14+ million lives
§ Board has approved plans for another 941 MW RE power across India operations including HZL under group captive RE power development program
Mr Sunil Duggal, Chief Executive Officer, Vedanta, said “we have delivered a strong set of financial results and steady operational performance in challenging macroeconomic environment. Our quarterly Profit after tax grew 15% on sequential basis to ₹3,092 crore; free cash flow (pre capex) stood at ₹6,504 crore with focus on working capital and cost optimization. Our ESG initiatives have been recognized by several major external rating agencies. We have approved plans for another 941 MW RE power under group captive RE power development program. I am also happy to share that Vedanta and Hindustan Zinc Limited Boards have taken strategic initiative to consolidate Zinc International under Hindustan Zinc. It will be a win-win transaction, unlocking significant value for both Vedanta Limited and Hindustan Zinc Limited shareholders.”