Vedanta Q4 FY22 Results
Mumbai, April 29,2022: Consolidated Results forthe FourthQuarter and FullYear ended 31stMarch2022
- Record consolidated quarterly revenue of ₹ 39,342 crore, up 41% YoY
- Highest ever quarterly EBITDA of ₹ 13,768 crore, up 51% YoY
- PAT (before exceptional and one-time tax credit)of ₹ 7,570 crore, up 48% YoY
- Net Debt at ₹ 20,979 crore, declined by ₹ 6,590 crore since 31st Dec 2021
- All time high consolidated revenue of ₹ 131,192 crore, up 51% YoY
- Highest ever annual EBITDA of ₹ 45,319 crore, up 66% YoY
- Robust Industry leading EBITDA margin1 of 39%
- PAT (before exceptional and one-time tax credit)of ₹ 24,299 crore, up 95% YoY
- Free cash flow before capex ₹ 27,154 crore, up 69% YoY
- Strong double-digit ROCE2at c.30%, ~1.6 times YoY
- Net Debt/EBITDA at 0.5x lowest in 5 years; net debt to equity at 0.25x
- Strong liquidity position with total cash and cash equivalent at ₹ 32,130 crore
- Record dividend payout of ₹ 45/share; ~14% dividend yield
- Credit rating upgrade by both CRISIL and India Rating to AA with stable outlook
Shareholders value creation –
Vedanta has consistent track record of rewarding its shareholders with strong dividend pay-out. Last year we paid ₹45 per share amounting to ₹16,728 crore which translates into ~14% dividend yield one of the highest among peers in FY22andhadrecord total shareholder’s return. The board, in its meeting held today 28th April, has approved first interim dividend for FY23 of ₹31.5 per share amounting to ₹11,710 crore. This is line with our robust performance on profitability and cash flows. This will also help the Vedanta group in deleveraging, in line with latest capital allocation policy.
Operational Highlights FY22 –
- Record annual volume across key businesses with stable production from Oil and Gas
- Maintained 1stquartile cost curve positioning globally, across key segments
- Strong margins across key businesses despite increase in input commodity prices and power cost
- Record Aluminium production at 2,268kt, up 15%YoY
- Highest ever Alumina production at 1,968kt, up 7%YoY
- Zinc India
- Highest ever Mined metal production, crossed 1 million tonnes mark
- Best ever metal production of 967kt, up 4%YoY
- Zinc International:
- Record mined metal production at Gamsberg of 170 kt, up 18%YoY
- Oil & Gas:
- Sustained average gross operated production at 161 kboepd
- Two new discoveries named Durga and Jaya in OALP block
- Iron Ore:
- Highest ever sales of 5.7 million tonnes at Karnataka, up 30%YoY
- Record pig iron production of 790 kt, up 33%YoY
- Continued engagement with the stakeholders for resumption of Goa mining
- Record Hot metal production of 1.36 million tonnes, up 5%YoY
- Saleable Steel production at 1.26 million tonnes, up 6%YoY
- Commenced commercial production from recently acquired two Iron ore mines in Orissa
- Record Ferro Chrome production of 75 kt
- EBITDA margin increased by 3x to $534 per tonne
- Copper India:
- Due legal process is being followed to achieve a sustainable restart of the operations
ESG Highlights –
- 3,200+ Nand Ghars created for women and child welfare, signed MoU with Government of Rajasthan for developing 25,000 Nand Ghars
- ₹ 359 crores Social Investment; improving the lives of 4.36 million people
- ₹ 54,104 crore contribution to the National Exchequer
- ~13.75 million tonnes GHG emissions avoided
- 31% water recycled
- Electric mobility: Jharsuguda partners with GEAR India to supply 23 e-forklifts; deployed 50+ electric vehicles at Hindustan Zincand ESL steeltogether
- 10-year MoU signed with TERI to develop implementation programs to further our ESG vision
- Signed Power Distribution Agreementfor 580 MW renewable energy- a significant milestone towards 2.5 GW RE Round the Clock commitment
- Launched green Aluminium under the brands ‘Restora’ & ‘Restora Ultra’ to usher new era of green metals
- Collaboration with TUV-SUD to develop roadmap for our ‘Net Water Positive’ Initiative
- 1st fly ash rake from Jharsuguda dispatched to ACC-Holcim
- Commenced Ash backfilling in one of the coal India’s open cast mines in Mar’22
- Used 17kt biomass in Hindustan Zinc; committed to using 5% biomass in our thermal power plants
Mr Sunil Duggal, Chief Executive Officer, Vedanta, said “I am delighted to share recordoperational and financial performance for FY22. We have delivered historical best EBITDA of ₹45,319 crore and PAT(before exceptional and one-time tax credit)of ₹24,299 crore. This reflects our relentless focus on volume growth and operational efficiency, underpinned by structural integration and technology adoption. The strong free cash flow (pre capex) of ₹27,154crore has allowed us to reinvest for growth, further strengthen our balance sheet and continue our attractive dividend pay-out. As a part of our ESG Journey, we have signed an agreement for 580 MW renewable power distribution which brings us one step closer towards becoming a Net Zero Carbon organization. As we leap forward, we are committed to make Vedanta stronger through growth, vertical integration, operational efficiencies and renewed ESG purpose.”
- Excluding custom smelting
- Return on capital employed on LTM basis
Consolidated Financial Performance –
(In₹ crore, except as stated)
- Excludes custom smelting at Copperbusiness
- Exceptional Items Gross of Tax
- One time tax credit includes deferred tax asset on losses recognised in ESL
- Achieved record consolidated revenue of ₹39,342 crorein 4QFY22 with 41%YoY and 17%QoQ growth; supported by higher sale volumesand improved commodity prices.
- FY22 consolidated revenue at ₹131,192 crore was also best ever with 51%YoY growth.
- EBITDA andEBITDA Margin:
- Achieved highest everconsolidatedEBITDA of ₹13,768 crorein 4QFY22. This 51%YoYand 26%QoQ growth was mainly due to higher sales volume, supportive commodity prices and operational efficienciesdespite higher Cost of production amidst input commodity inflation.
- FY22 consolidated EBITDA at ₹45,319 crore was also historically high with66%YoY growth; EBITDA margin1stood robust at 39%.
- Depreciation & Amortization:
- 4QFY22 Depreciation& amortisation increased by 16%YoY to ₹2,379 crore, mainly due to increase in amortisation with increasedOre production at Zinc Business. On QoQ basis, it was up by 5% as impact of increasedin Ore production at Zinc Businesswas partially offset by decrease inoverall working interest production at Oil & Gas business.
- FY22 Depreciation & amortisation increased by 16%YoY to ₹8,895 crore, mainly due to increase in amortisation because of increased – a) Ore production at Zinc Business,b) higher depletion at Oil & Gas business,andc) capitalisation at Aluminium business.
- Finance Cost:
- 4QFY22Finance cost increased 1%YoY to ₹1,333 crore asone-timecharges paid on Vedanta Aluminiumloan were broadly offset by lower average borrowings and decreased costof borrowings. On QoQ basis, Finance cost wasup by 10%,mainly due to increase in average borrowings andone timecharges paid on Vedanta Aluminium loanafter a partial offset from decreasedcost of borrowings.
- FY22 Finance costdecreased 8%YoY to ₹4,797 crore, mainly due to lower average borrowings and decreased cost of borrowings.
- Investment Income:
- 4QFY22 Investment Income decreased 40%YoYto₹520crore, mainlydue to Mark to Market movement and change in Investment mix.
- FY22 Investment Income decreased 28%YoY to ₹2,341 crore, due to Mark to Market movement andchange in Investment
- 4QFY22Exceptional itemsat₹(336)crore;primarily relates to ₹2,697crore gain from impairment reversal in Oil & Gaswhich was partially offset by exploration cost written off in cairn ₹2,403 crore.
- FY22 Exceptional items at ₹(769) crore;primarily relates to ₹2,697 crore gain on account of impairment reversal in Oil and Gas which was partially offset by exploration cost written off in cairn ₹2,618 crore, exceptional loss on account of provision against KCM receivables ₹217 crore, deposit write of ₹125 crore in Aluminium business, fly ash provision ₹288 crore, payment under amnesty scheme at Zinc India₹134 crore.
- 4QFY22 normalized Effective tax rate (ETR)was 28%(excluding tax on exceptional items of ₹28crore)compared to 28% in 4QFY21 and 30% in 3QFY22 on account of higher benefit u/s 10AA and change in profit mix.
- FY22 normalized ETR is 28%(excluding ₹ 178 croretax on exceptional items) compared to27% in FY21 (excluding₹3,111croreDeferred tax assets recognized on account of losses in steel business).
- Profit after Tax before exceptional and one-time tax credit and Earnings per Share (EPS):
- 4QFY22Profit after Tax (beforeexceptional item and one-time tax credit) was at ₹7,570crore, up 48 % YoY.
- For FY22, Profit after Tax (before exceptional item and one-time tax credit) was at ₹24,299 crore, up 95%YoY.
- EPS for FY22 before exceptional items was at ₹52.02per share compared to ₹32.80per share in FY21.
- Leverage, liquidity, and credit rating:
- Gross debt declined by ₹3,919 crore YoY in FY22 to ₹53,109 crore as on 31st Mar 2022; primarily with deleveraging at Balco and CIHL.
- Net debt declined by ₹3,435 crore YoY in FY22 to ₹20,979 crore on 31st Mar 2022; driven by strong cash flow from operationsafter ₹11,043crore capex and ₹19,356crore dividend pay-out.
- Cash and cash equivalentsposition is robust at ₹32,130crore. The Company follows a Board-approved investment policy and invests in high quality debt instruments with mutual funds, bonds, and fixed deposits with banks.
- The company has investment grade credit; both CRISIL and India Ratings upgraded rating to ‘AA’ with stable outlook.
Key Recognitions –
Vedanta has been consistently received various awards and accolades. Few recognitions received during 4QFY22 are given below:
- Hindustan Zinc was included in the ‘Sustainability Yearbook 2021’
- Hindustan Zinc was bestowed with outstanding accomplishment in corporate excellence in the 16th CII – ITC sustainability award
- Cairnwas awarded the “Sustainability 4.0 Award 2021: Leaders’ Award’ Under Mega Large Business Sector by Frost and Sullivan & TERI
- Cairnwas awarded the ‘Global CSR Excellence and Leadership Award’ for the ‘Best Rural Health Initiative’ by the ‘World CSR Congress Forum’
- ‘VedantaJharsuguda won the ‘Gold Awards’ in ‘Manufacturing Excellence & Digital Smart Manufacturer categories at IMexl Integrated Manufacturing Excellence Initiative
- VedantaLimitedJharsuguda was awarded the ‘Greentech Award for Safety Excellence’
- ESLSteel Limitedwas awarded the ‘Best Indirect Tax Team Award of the Year’ at the 5th Annual GST Summit & Awards 2022
- ESL awarded the ‘CHRO Inclusion Vision Award’ and ‘HR Excellence in Change Management Award’ in 2nd Edition CHRO Vision & Innovation Awards 2022
- FACOR bagged one Excellent and two Distinguished Award at National Convention on Quality Concepts (NCQC) 2021 organized by QCFI Coimbatore
- FACOR was awarded the ‘British Safety Award’
- Vedanta Iron ore Karnataka bagged the ‘CII HR Excellence Award’
Results Conference Call–
Please note that the results presentation is available in the Investor Relations section of the company website https://www.vedantalimited.com/Pages/FinancialReports.aspx
Following the announcement, a conference call is scheduled at 5:15 PM (IST) on Apr 28, 2022,where the senior management will discuss the company’s results and performance.The dial-in numbers for the call are as below:
|Earnings conference call|
on April 28, 2022,
from 5:15 – 6:15 PM (IST)
|Universal Dial-In||+91 22 6280 1114|
+91 22 7115 8015
|India National Toll Free||1 800 120 1221|
|International Toll Free*||Canada 01180014243444Hong Kong 800964448Japan 00531161110Netherlands 08000229808Singapore 8001012045UK 08081011573USA 18667462133|
|International Toll*||HongKong +852 30186877Japan +81 345899421Singapore +65 31575746SouthAfrica +27 110623033UK +44 2034785524USA +1 3233868721|
|Online Registration Link||https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=5455737&linkSecurityString=16f7b60119|
|Call Recording||Will be available on website April 29, 2022, onwards|