2024-11-12 23:11:00
Indian multinational Vedanta Limited (“Vedanta”) (NSE: VEDL), the world’s leading critical and future minerals, energy and technology conglomerate, announced its results for the second quarter and first half ending September 30, 2024. It reported the highest first half EBITDA ever at US$2.47 billion, a 46% increase compared to the previous year1.
The company’s second-quarter consolidated revenue was $4.4 billion, an increase of 5% from the previous quarter and 10% from the previous year1, while consolidated EBITDA was $1.2 billion, an increase of 44% compared to the previous year1. PAT before exceptional items was US$533 million, an increase of 230% compared to the previous year1. Vedanta recorded the best EBITDA2 margin in the industry at 34%, an increase of around 900 basis points over the previous year1. This generated free cash flow (pre-capex) of US$1.02 billion, an increase of 50% compared to the previous year1. Net debt/EBITDA was 1.49x in the second quarter of fiscal 2025, the best position in the last six quarters.
Regarding the results, Ajay Goel, CFO da Vedanta Limited, commented the following: “This quarter was exceptional, highlighted by significant progress in our corporate and strategic initiatives, solid financial results and excellent operational performance. This good performance has to do with cost efficiency, volume growth and favorable commodity prices. Additionally, we raised $1.4 billion in Vedanta through a QIP [colocação institucional qualificada] of US$ 1 billion and an OFS [oferta para venda] of US$400 million from HZL. At the same time, with VRL’s $1.2 billion bond issuance and continued deleveraging, we have reduced Holdco’s debt. to $4.8 billion, the lowest level in a decade.”
Vedanta hopes to build on this momentum in the second half of this year as many of its growth projects come online. Historically, Vedanta has recorded more than 60% of its revenues in the second half of the year.
Arun Misra, Executive Director, Vedanta Limitedadded: “ Through our interventions and structural initiatives, we have significantly reduced our cost of production over the last 12 to 15 months, and we will continue this trend in the coming quarters. As we move forward, operational excellence, sustained growth, ESG leadership and a robust pipeline of growth projects remain our strategic priorities.”
Vedanta has proposed one of India’s biggest spin-offs that will ultimately result in six separate publicly listed companies. The spin-off of the company is underway and in its final stages.
For more information, visit www.vedantalimited.com.
Note: The USD-INR exchange rate used in this release was 83.8 in the second quarter and 83.6 in the first half.
1 Comparative data excludes the impact of Cairn’s one-time arbitrage gain in the second quarter of fiscal year 2024.
2 Does not include custom casting in the copper business.
The original language text of this announcement is the official authorized version. Translations are provided as a facility only and must refer to the text in the original language, which is the only version of the text that has legal effect.
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Source: BUSINESS WIRE
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**Interview with Ajay Goel, CFO of Vedanta Limited**
*Date: November 13, 2024*
*Interviewer: [Your Name]*
**[Your Name]:** Thank you for joining us today, Ajay. Vedanta has reported its highest-ever first half EBITDA. What factors do you think contributed to such impressive results?
**Ajay Goel:** Thank you for having me. This quarter indeed marked a significant milestone for us. The key drivers behind our strong performance include our focus on cost efficiency, volume growth, and favorable commodity prices. Our ability to raise $1.4 billion through various financial instruments also provided us with a robust capital base, enabling us to pursue our strategic initiatives effectively.
**[Your Name]:** You mentioned a successful Qualified Institutional Placement (QIP) and an offer for sale (OFS). How do these fundraising activities align with your long-term goals?
**Ajay Goel:** These fundraising activities are part of our broader strategy to reduce our debt and strengthen our balance sheet. The QIP raised $1 billion, and the OFS generated another $400 million. This influx of capital allows us to deleverage further; we’re on track to lower our holding company’s debt to $4.8 billion, the lowest in a decade. This financial stability fuels our growth and supports our future projects.
**[Your Name]:** Looking ahead, how does Vedanta plan to sustain this momentum into the second half of the fiscal year?
**Ajay Goel:** Historically, we have seen more than 60% of our revenues generated in the second half of the year. We are optimistic as many of our growth projects are slated to come online soon. Our focus will remain on operational excellence, maintaining cost efficiency, and enhancing our ESG leadership to ensure long-term sustainability.
**[Your Name]:** You mentioned significant structural interventions aimed at reducing production costs. Can you elaborate on those strategies?
**Ajay Goel:** Certainly. Over the past 12 to 15 months, we’ve implemented a series of interventions to streamline our operations and optimize resource utilization. This has led to a substantial reduction in our cost of production. We will continue to pursue these efficiencies in the upcoming quarters, ensuring we remain competitive while maintaining our commitment to sustainable practices.
**[Your Name]:** Lastly, Vedanta is initiating a significant spin-off plan. What can you tell us about this development?
**Ajay Goel:** The spin-off represents a transformative opportunity for Vedanta. We are in the final stages of separating into six distinct, publicly listed companies. This move is designed to enhance operational focus, unlock value for shareholders, and provide greater transparency in our diverse business segments. We believe this strategic restructuring will set the stage for future growth and more tailored management of our various operations.
**[Your Name]:** Thank you, Ajay, for sharing these insights. We’re looking forward to seeing how Vedanta continues to progress in the months ahead.
**Ajay Goel:** Thank you for having me. We’re excited about our future and appreciate the interest in Vedanta’s journey.