Vedanta Resources Takes $4.5B Writedown as Oil Drags
May 14 (Reuters) – Vedanta Resources Plc posted a full-year loss after a sharp drop in crude prices precipitated a $4.5 billion writedown related to its Indian oil and gas business.
The company's London-listed shares fell as much as 4 percent early on Thursday before recovering to 660 pence, unchanged from the previous day's close.
Best known as a mining company, Vedanta bought a controlling stake in Cairn India Ltd, India's largest private-sector oil producer, in 2011.
Like other resources companies, it has struggled with plummeting commodity prices in the last year. Brent crude collapsed to a low of just above $45 a barrel in January from a high of $115 last June.
Vedanta Resources on Thursday reported a 17 percent drop in full-year core earnings, which Chairman Anil Agarwal attributed in part to "unprecedented declines" in oil and iron ore prices.
Vedanta's Indian unit, Vedanta Ltd, had already given notice of the impairment charge when it announced its own full-year results last month. It said the charge was related mostly to its acquisition of Cairn India.
Vedanta Resources also reported a small impairment charge related to its copper operations in Zambia.
Vedanta Resources said operating profit from its oil and gas business fell 78 percent. It accounted for about 12 percent of the company's total operating profit, compared with more than 40 percent a year earlier.
The company, which also operates in South Africa, Namibia, Liberia, Ireland and Australia, said earnings before interest, tax, depreciation and amortisation for the year ended March 31 fell to $3.74 billion.
Net loss attributable to Vedanta Resources' equity holders was $1.80 billion, compared with $196 million a year earlier.
Full-year revenue was little changed at $12.88 billion.
On a call with reporters, Chief Executive Tom Albanese said he expected commodity prices to improve gradually.
"The current oversupply positions in some of these products will be progressively whittled away by the continued - albeit slower - demand growth in most of the commodities we produce," he said. ($1 = 63.9000 Indian rupees)
(Editing by Robin Paxton)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- US Confirms Reimposition of Oil Sanctions against Venezuela
- Analyst Says USA Influence on Middle East Seems to be Fading
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- Russian Ships to Remain Banned from US Ports
- Brazil Court Reinstates Petrobras Chair to Divided Board
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally