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Global mining and metals company Vedanta reports 79% rise in Q3 earnings

20th February 2017 Print

As Vedanta Resources reports its Q3 results Helal Miah, investment research analyst at The Share Centre, explains what it could mean for investors:

“This morning, global and diversified metals and mining company Vedanta Resources cited higher commodity prices as a reason for a 79% rise in third quarter earnings before interest tax and depreciation and amortisation, compared to the same period last year. Interested investors should also appreciate that the group reported an increase in revenues and saw its cash flow position strengthen over the period.

“The company intends to grow its reserves and resources at a faster rate than it depletes them through exploration and acquisitions. Indeed, Vedanta has been in the process of simplifying its structure, which investors should acknowledge is helping to lower costs, improve access to capital markets and enhance the visibility of earnings and cash flow.

“Tom Albanese, the Chief Executive of the group was also keen to highlight today that the company had made ‘substantial operational progresses during the quarter with a ramp up in its Aluminium, Power and Iron Ore capacities.

“Vedanta is a business with a lot of debt on its books but it has been making good progress in refinancing upcoming bond maturities and they have benefitted with an upgrade to B+ by S&P recently.

“Given the impressive production growth of the various commodities and further oil discoveries made by the energy subsidiary, we continue to recommend Vedanta as a ‘buy’ for investors seeking capital growth and willing to accept a high level of risk.”