October 31, 2018 / 11:45 AM / 9 months ago

Smelter closure, weak zinc ops depress Vedanta's profit

A man walks past the logo of Vedanta outside its headquarters in Mumbai, January 31, 2018. REUTERS/Danish Siddiqui/Files

(Reuters) - Indian miner Vedanta Ltd reported on Wednesday a 34 percent fall in second-quarter net profit, hit by lower revenue from its zinc operations, rising costs and the shutdown of a smelter in southern India.

The Indian unit of diversified mining group Vedanta Resources has been mired in disputes regarding its Tuticorin copper smelter in the southern state of Tamil Nadu after a protest to shut the plant on environmental concerns turned violent, killing 13 people. The state ordered the permanent closure of the plant and disconnected its power supply in May.

The fate of the smelter, which has an annual production capacity of more than 400,000 tonnes, now lies with an independent judicial committee.

Vedanta said its net profit attributable for July-September totalled 13.43 billion rupees ($182 million). That was down from 20.45 billion rupees a year earlier, but beat a forecast of 12.68 billion rupees by nine analysts, according to Refinitiv data.

Earnings were hit by the closure of the Tuticorin smelter, as well as by higher costs due to input commodity price inflation, and “lower volume” at Zinc India and Zinc International, it said without elaborating.

Total expenses in the quarter jumped 11.4 percent to 209.99 billion rupees.

Revenue from the group’s Zinc & Lead - India operations fell 12.8 percent, while revenue from its Zinc International operations declined by 36.6 percent.

However, revenue from operations for the quarter rose 5.2 percent to 227.05 billion rupees, Vedanta said in a filing.

($1 = 73.9600 Indian rupees)

Reporting by Krishna V Kurup in Bengaluru; Editing by Vyas Mohan and Susan Fenton

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