Vedanta hurt by aluminium and currency

VEDANTA Resources half-year profits have been hit by its aluminium business and by the weakening Indian rupee, it said yesterday.

The company, which focuses on India, said its underlying attributable profit dropped more than 34 per cent to $186.3m (£116.9m), falling below expectations on the back of lower contributions from subsidiaries.

Its attributable profit -- which includes the impact of mark-to-market foreign exchange losses at its Indian subsidiaries -- fell 92 per cent.

That was despite a 27 per cent increase in core profit to $1.7bn, in line with expectations as Vedanta benefitted from its newly acquired international zinc operations, and on the back of a 43 per cent revenue rise as metal prices climbed. Vedanta said it did not expect the turbulence of the first half, including the jump in aluminium costs due to a power outage, to continue into the second half.

The miner told analysts it would trim costs at its Vedanta Aluminium division. Vedanta is in the final throes of completing its long-awaited deal to take control of oil explorer Cairn India from Cairn Energy after securing approval from the Indian government and shareholders.

But the deal has inflated the group’s net debt, which stood at $7.2bn at the end of the period.