London-headquartered Vedanta Resources (VRL), the parent company of Indian mining major Vedanta, expects to post an Ebitda of $6.5 billion in FY25, buoyant on volume growth from ongoing projects. This would be the highest-ever Ebitda recorded by the firm.The firm has also earmarked a capex of $6 billion to expand capacities across businesses. However, the timeframe for the capex was not disclosed.
The Ebitda growth would be also supported by cost efficiency and metal prices, while free cash flows will continue strengthening its deleveraging strategy, VRL said in a statement.VRL, an unlisted company, posted its second-highest Ebitda of $4.7 billion in FY24, a 2% rise from $4.6 billion recorded in FY23.This was mainly due to the softening of input commodity prices, coupled with strategic cost savings, a one-time arbitration award in the oil & gas business which is partially offset by a slip in commodity prices, primarily of aluminium, zinc, and Brent and a strategic hedging gain recognised in the previous year, the company said.
“The year FY24 was a pivotal year for VRL, characterised by transformative initiatives to unlock greater value for stakeholders, drive a sustainable tomorrow and strengthen the competitive edge,” said Vedanta Group chairman Anil Agarwal.”Looking ahead, our unwavering commitment to substantial capex projects worth $6 billion for expanding our capacities across the businesses and integrating the aluminium business will be a cornerstone of our future growth,” he said.Cost savings resulted in an increase in Ebitda by $287 million, enabling the company to close the year with cash and cash equivalents of $2 billion. However, the firm’s profit attributable to equity holders (before special items) fell 58.1% to $31 million ($49 million in FY23) and revenue (before special items) dipped to $17.1 billion ($18.1 billion).The revenue fall was driven by lower output commodity prices, primarily of aluminium, zinc, and Brent, partially offset by higher volume in the aluminium, copper, and iron ore businesses.
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During the year under review, its net debt fell to $12.3 billion in FY24 ($12.7 billion), primarily due to strong cash flow from operations and working capital release. VRL also reduced debt by $3.7 billion in two years, a year earlier than its target. The firm plans to reduce debt further to $3 billion in the next three years, of which about $500 million has already been achieved in the first two months of FY25, it said.”The firm plans to reduce debt further to $3 billion in the next three years, of which about $500 million has already been achieved in the first two months of FY25,” it said.Vedanta holds a majority 64.9% stake in Hindustan Zinc (HZL), while the Central government holds a minority 29.5% stake.
From: financialexpress
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