Vedanta Resources sees earnings rise on record production

Vedanta Resources rewarded shareholders with a six per cent rise in dividend as the miner unveiled an increase in revenue and earnings in its full-year results.

The company will pay a dividend of $0.37 a share after achieving a 21% year-on-year jump in earnings before interest, tax, depreciation and amortisation (EBITDA) to $4.9bn for the year to the end of March.

Revenue climbed 7.0% to $14.9bn, driven by record production of zinc-lead, silver, oil and gas.

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A 4.8% rise in zinc-lead and silver production was boosted by strong results in India while a 32% increase in oil and gas production was buoyed by higher output at the Rajasthan block.

The FTSE 100 group said it reduced unit costs across majority of its operations to mitigate industry-wide inflationary pressures.

"Whilst we are not immune to cost inflationary pressures, we continued to control costs and have demonstrated a track record of implementing operational improvements and maintaining our relatively new asset base at low sustaining capital expenditure costs," Chairman Anil Agarwal said.

Vedanta also cut its net debt by $1.5bn and reduced its gearing ratio to 31% from 35%. The group delivered free cash flow of $1.5bn after growth capital expenditure.

Annual results improved despite the effects of a ban on mining iron ore in Karnataka and Goa. Iron ore production of saleable ore fell 73% to 3.7m tonnes.

The Supreme Court recently lifted the ban in Karnataka and Vedanta will resuming mining operations in the region However, mining in Goa remains suspended as court proceedings continue.

Vedanta is India's largest private sector miner of iron ore.

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