MUMBAI Indian resources group Vedanta Ltd (VDAN.NS) posted a 99 percent plunge in third-quarter profit on Thursday due to lower global commodity prices, although it beat analysts' forecasts for a net loss.
The company said it expects its cost-cutting drive will help its financial position to improve by the end of this fiscal year in March.
The group has focused on reducing its operating and financing costs to cushion the impact of the slump in commodity prices, which has also battered international rivals and led to some mining projects around the world being suspended.
Vedanta, with operations spread across crude oil and natural gas, zinc, aluminium, copper, power and iron ore, has been hit mainly by the drop in prices of aluminium and crude oil, the two biggest contributors to the company's sales.
"We had a number of cost efforts which did not kick in in the third quarter which will be reflected now. Also, we will get the benefit of lower alumina costs ... Our cost structure will be better in Q4 than in Q3," said Vedanta CEO Tom Albanese.
The company, a unit of metals tycoon Anil Agarwal's Vedanta Resources (VED.L), reported a net profit of 180 million rupees ($2.6 mln) in the quarter through Dec. 31, down from 15.9 billion rupees a year earlier.
Analysts' average forecast had pointed to a net loss of 1.8 billion rupees for the quarter.
The company's net sales dropped 23 percent from the year-ago period to 148.01 billion rupees, dented by the sharp decline in revenue from its oil and gas and aluminium businesses, it said in a statement.
India's largest privately owned miner has also been hit in recent quarters by mining bans in its key producing states. It resumed mining in Goa, the top-producing state, in August, but the revival has been sluggish due to slowing demand from China.
Albanese said that the company had so far mined 1.3 million tonnes from Goa, and it would fail to meet the March-end target of 5 million tonnes. "We expect to ship about 3.5 million tonnes in the current (fiscal) year," he said.
Last June, Vedanta made a $2.3 billion offer to buy out minority shareholders in its cash-rich oil and gas unit, Cairn India Ltd (CAIL.NS). [nL3N0Z006C]
The company expects Cairn India shareholders to hold a vote on the issue in the next quarter and aims to complete the merger before the end of next quarter, its statement said.
($1 = 68.2113 Indian rupees)
(Reporting by Promit Mukherjee; Editing by Sumeet Chatterjee and Susan Fenton)
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Updated Date: Jan 29, 2016 00:15:10 IST