Deferred tax gain bolsters Vedanta's Q2 profit by 61 pcttext_fields
New Delhi: Mining baron Anil Agarwal-led Vedanta Ltd on Thursday posted a 60.6 per cent rise in consolidated profit to Rs 2,158 crore for the quarter ended September 30, mainly on account of deferred tax gain and higher other income.
The company had posted a consolidated profit "attributable to owners of Vedanta Ltd" of Rs 1,343 crore in the year-ago period, Vedanta said in a BSE filing.
However, the consolidated income in the July-September period dropped to Rs 22,814 crore from Rs 23,279 crore in the year-ago period, the filing said.
When asked about the reasons for the rise in profit, Vedanta Chief Executive Officer Srinivasan Venkatakrishnan in a conference call that "One is robust operating performance... We did have a significant movement on the tax line. Thanks to the lower tax rate announced by the government... It has resulted in the release of a lot of deferred tax liability as well."
The company had a net deferred tax gain of Rs 1,891 crore during the September 2019 quarter, the filing said.
"Revenue (from operations) in Q2 FY2020 was at Rs 21,739 crore, lower 3 per cent y-o-y, primarily due to lower commodity prices partially offset by additional volumes from commencement of Gamsberg operations and higher sales at Iron Ore Karnataka," the company said in a statement.
The company's consolidated other income during the July-September period increased to Rs 856 crore, over Rs 574 crore in the year-ago period.
Venkatakrishnan said in the statement, "We are at an exciting transition that will see the company accelerate the expansion of its reserves and resource base over coming quarters."
He said the expansion is being delivered through strict capital allocation and balance sheet focus aimed at creating value for the company's stakeholders.
"As we look forward to the year, we have in place the building blocks to enhance our performance in the three key businesses. We have immense confidence in being able to deliver the best from our assets and people whilst always being committed to our core values around ethics, governance and social responsibility," Venkatakrishnan said.
The company said its gross debt reduced by Rs 3,279 crore, on its continued focus on deleveraging.
Looking at the outlook in terms of prices keeping at high level, he said, "We expect the prices to improve in the coming quarters and we have seen the sign of this during the course of this month. You would have seen what has happened to zinc, what has happened to aluminium, what has happened to silver."
He further said the company was on track to announce an increase in its reserves and resources later this year both in the mining arena and oil and gas arena.
The company's net debt reduced by Rs 8,322 crore in the second quarter of 2019-20.
Vedanta Ltd said it has a strong financial position with total cash and liquid investments of Rs 35,817 crore.
At Zinc India, Vedanta's Indian zinc unit, the ore production rose 3 per cent y-o-y to 3.6 million tonne with strong growth at Rampura Agucha and Zawar mines and mined metal production was at 2,19,000 tonnes, up 2 per cent quarter-on-quarter.
The company, it said, emerged as highest bidder for Jamkhani coal block in Odisha.