April 20, 2024

Vedanta reports ₹ 9,362 crore EBITDA, up 32%QoQ; Strong free cash flow (pre capex) of ₹7,211 crore

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National, May 15th, 2023: Audited Consolidated Results for the Fourth Quarter and Full year ended 31st March 2023.

Financial Highlights

  • 4QFY23:
    • Consolidated quarterly Revenue of ₹37,225 crore, up 10% QoQ.
    • Consolidated quarterly EBITDA of ₹9,362 crore, up 32% QoQ with EBITDA margin[1] of c. 29%.
    • Consolidated Profit after tax of ₹3,132 crore, up 1%QoQ
    • Generated robust Free cash flow (pre capex) of ₹7,211 crore, up 11% QoQ
    • Declared interim dividend of ₹33/share in 4QFY23.
  • FY23:
    • All time high consolidated revenue of ₹ 145,404 crore, up 11% YoY
    • 2nd highest ever annual EBITDA of ₹ 35,241 crore with EBITDA margin* of c.28%
    • Record Free cash flow (pre capex) of ₹28,068 crore, up 3%
    • Continue to maintain strong double-digit return on capital employed c.21%
    • Net Debt/EBITDA of ~1.28x, maintained within capital allocation framework
    • Highest ever contribution to exchequer ~₹74,000 crore in FY23
    • Proactive commodity hedging for risk management, recorded ₹3,088 crore gain
    • Historic high shareholder returns declared interim dividend of ₹101.5 per share
    • Continue to maintain healthy cash and cash equivalents of ₹20,922 crore on 31st Mar2023

Operational Highlights FY23 –

Key businesses continue to deliver strong operating performance:

  • Aluminium
  • Highest ever aluminium production at 2,291 kt, up 1% with Jharsuguda ramp up
  • Alumina production at Lanjigarh refinery was at 1,793 kt
  • Zinc India
  • Record mined metal production at 1,062kt, up 4% YoY
  • Historic high refined metal production at 1,032kt, up 7% YoY
  • Record saleable silver production at 714 tonnes, up 10% YoY
  • Zinc International
  • Gamsberg achieved record production of 208 kt, up by 22% YoY
  • BMM production increased by 25% to 65 kt
  • Oil and Gas
  • Signed 10-year extension to production sharing contract to operate Rajasthan Oil block
  • Commenced first Gas & Condensate production facility in Jaya field of OALP block
  • Average daily gross operated production of 143 kboepd, natural decline was partially offset by the infill wells campaign in MBA and RDG fields
  • Iron ore
  • Karnataka saleable ore production was at 5.3 million tonnes
  • Commenced commercial production at Nicomet – India’s only Nickel Cobalt operations
  • Started production from Western Cluster Liberia mines, expanding global operations
  • Steel
  • Highest ever hot metal production of 1,367kt
  • Record finished goods production of 1,285kt, up 2% YoY
  • Facor
  • Achieved all time high ore production of 290kt, up 16% YoY
  • Commissioned new 60ktpa furnace; total ferro-chrome capacity reached 140 ktpa
  • Copper India:
  • Cathode production from the Silvassa was 148 kt, up by 18% YoY driven by continuous debottlenecking of plant capacity and improved operational efficiencies.
  • Due legal process is being followed to achieve a sustainable restart of operations

FY23 ESG Highlights –

  • Ranked 6th among DJSI’s top 10 global diversified Metal & Mining peers
  • Signed Renewable Energy PDAs of 1636 MW across the group as on 31st March 2023
  • Cairn, IOB and VZI-BMM achieved water positivity
  • 100% of business sites audited for ESG compliance
  • Workplace gender diversity increased to 14% from 11% in YoY
  • Biomass usage improved to 78000 tonnes; 4x higher than FY22
  • Total water consumption reduced by 10% YoY
  • HVLT waste usage at 95%
  • Launched “Enablon” an integrated sustainability risk management and ESG reporting software
  • 1 million trees planted as part of commitment to plant 7 million trees by 2030
  • 4500+ Nand Ghars created for women and child welfare
  • ~₹74,000 crore contribution to National Exchequers
  • Spent INR 454+ crore on CSR initiatives for communities, positively touching 44 million lives

Mr Sunil Duggal, Chief Executive Officer, Vedanta, said “Our commitment to operational excellence has helped us deliver record performance across our key businesses. We have delivered the highest-ever free cash flow (pre-capex) of ₹28,068 crore, enabling us to reinvest for business growth and provide our valued shareholders with attractive dividends. Our progress on ESG transformation has been recognized by leading rating agencies, making it a remarkable year for us. We finalized 1868 MW renewable power delivery agreements which brings us one step closer towards becoming carbon neutral by 2050 or sooner. Going ahead, we remain committed to operational excellence, shareholder value creation and transforming for good.”

  • Revenue:
  • 4QFY23 Revenue increased by 10%QoQ to ₹37,225 crore owing to higher sales across businesses and improved output commodity prices.
  • FY23 consolidated revenue increased by 11% to ₹ 1,45,404 crore due to higher sales across businesses, forex gain and strategic hedging gain despite lower commodity prices.
  • EBITDA and EBITDA Margin:
  • 4QFY23 EBITDA increased by 32% QoQ to ₹9,362 crore driven by higher volume across businesses, easing of input commodity inflation and higher output commodity prices
  • FY23 EBITDA decreased by 22% to ₹ 35,241 crore, on account of lower output commodity prices and higher input commodity prices, partly offset by higher sales, strategic hedging and foreign exchange gains.
  • EBITDA margin1 stood at c.28% in FY23
  • Depreciation & Amortization:
  • 4QFY23 depreciation & amortization increased by 2%QoQ to ₹2,765 crore due to increased ore production at Zinc India and increased 16%YoY due to increased ore production at Zinc India and higher depletion charge at Oil & Gas business.
  • FY23 depreciation & amortisation increased by 19% to ₹10,555 crore, due to increase in ore production at Zinc India and higher depletion charge at Oil &Gas business
  • Finance Cost:
  • 4QFY23 finance cost increased by 15% QoQ and 35% YoY to ₹1,805 crore owing to increase in average borrowings and average cost of borrowings
  • FY23 finance cost increased by 30% to ₹ 6,225 crore, due to increase in average borrowings
  • Investment Income:
  • 4QFY23 investment Income increased by 41% QoQ and 84% YoY to ₹959 crore on account of interest received on income tax refund, mark to market movement and change in investment mix
  • FY23 investment Income increased by 22% to ₹ 2,852 crore, due to mark to market movement, change in Investment mix and interest received on income tax refund
  • Exceptional Items:
  • 4QFY23 exceptional items at ₹ (1,336) crore, due to impairment charge of ₹ (1,218) crore and SAED impact of ₹ (118) crore in Oil and Gas business
  • FY23 exceptional items at ₹ (217) crore, due to impact of SAED of ₹ (970) crore partially offset by impairment reversal of ₹ 644 crore in WCL and ₹ 109 crore in ESL
  • Taxes:
  • 4QFY23 normalized Effective tax rate (ETR) was 31% compared to 24% in 3QFY23 on account of change in profit mix
  • FY23 normalized ETR was 30% compared to 28% in FY22 due to change in profit mix
  • Profit after Tax (PAT) and Earnings per Share (EPS):
  • 4QFY23 Profit after Tax was at ₹3,132 crore, up 1% QoQ
  • EPS for FY2023 was ₹28.50 per share
  • Leverage, liquidity, and credit rating:
  • Gross debt stood at ₹66,182 crore as on 31st Mar’23
  • Net debt was ₹45,260 crore as on 31st Mar’23; Net debt to EBITDA ratio was at ~1.28x
  • Cash and cash equivalents position remain healthy at ₹20,922 crore. The Company follows a Board-approved investment policy and invests in high quality debt instruments with mutual funds, bonds, and fixed deposits with banks.
  • Investment grade credit rating of ‘AA’ with negative outlook by CRISIL and India Ratings.

Key Recognitions

Vedanta has consistently received various awards and accolades. Few recognitions received during 4QFY23 are:

  • Vedanta Limited won prestigious ‘Kincentric Best Employer of the year 2022’ award
  • Hindustan Zinc recognized with ‘A’ score for Transparency on Climate Change by CDP
  • VAL–J, won Platinum award in Fame India Excellence Award for excellence in Fire and Security
  • BALCO awarded with ‘Sustainable Factory of the year’ award at Frost and Sullivan Sustainability awards
  • Hindustan Zinc’s Chanderiya & Dariba Captive Power Plants received the Mission Energy Foundation Award for Efficient Fly Ash Management in Northern region
  • HZL and BALCO won multiple awards at ‘36th National Convention on Quality Concepts (NCQC 2022)’ for Business excellence and Quality
  • VAL – J awarded with 25 Awards at ‘36th National Conventional Quality Concepts (NCQC 2022)’ for Business excellence and Quality
  • Cairn Oil and Gas won Economic Times Human Capital Award for Excellence in Creating a Culture Learning and Upskilling
  • HZL’s Chanderiya & Dariba Captive Power Plant receive the Mission Energy Foundation Award for Efficient Fly Ash Management in Northern region