HomeBase MetalsVedanta posts significant jump in earnings

Vedanta posts significant jump in earnings

Vedanta’s Nchanga
smelter in Zambia
 
London, England — MININGREVIEW.COM — 27 January 2010 – Indian-focused mining group Vedanta has posted a jump in third-quarter core earnings in line with analyst expectations, as metal prices rebounded and record amounts of iron ore and aluminium were churned out.

Liberum Capital revealed here that today’s trading update of the London-listed firm was ‘strong’.

“Vedanta remains one of our top picks in the sector for 2010 as the company is on the threshold of providing a 24.2% compound annual volume growth rate in the next five years," Liberum added.

Vedanta was the second best performing stock on the blue chip FTSE 100 index last year, surging 327%, but has faltered along with the rest of the sector so far this year due to worries about demand as China reins in credit growth.

The firm did not give an outlook on metals demand. Industry giant BHP Billiton warned last week that commodity prices would remain volatile this year as rich nations withdrew stimulus funding.

Vedanta’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased to US$662.5 million (almost R5 billion) in the three months to the end of December from US$10.1 million (R76 million)a year ago, when the sector was hit by sliding metals prices amid the economic downturn. Sales rose 64% to US$2.15 billion (R16 billion).

In Vedanta’s copper unit, output of cathodes rose 12% in India to 85 000 tonnes, and rocketed 68 % in Zambia to 42 000 tonnes due to the ramp up of the new Nchanga smelter.

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