July 31, 2018 / 11:51 AM / 2 years ago

Smelter closure hurts India's Vedanta, first-quarter profit lags estimate

FILE PHOTO: A bird flies past the logo of Vedanta installed on the facade of its headquarters in Mumbai, India January 31, 2018. REUTERS/Danish Siddiqui/File Photo

(Reuters) - Vedanta Ltd on Tuesday reported a 2 percent rise in first-quarter profit, but missed analysts’ estimates, as closure of its copper smelter in South India offset higher volumes at its aluminum and oil & gas businesses.

The Indian unit of diversified mining group Vedanta Resources Plc was forced to close its facility in the southern Indian state of Tamil Nadu in May, following protests by locals over alleged environmental violations which turned violent and culminated in the police opening fire, killing 13 protesters.

Net profit came in at 15.33 billion rupees ($223.53 million) in the three months ended June 30, up from 15.01 billion rupees a year earlier, the company said in a statement.

Analysts, on average, had expected a net profit of 21.56 billion rupees, according to Thomson Reuters I/B/E/S.

The shutdown of its Tuticorin copper smelter, India’s second-biggest with an annual production of more than 400,000 tonnes, has hit 350 companies that buy its products and led to over 3,000 layoffs, the company had told Reuters earlier this month.

Vedanta said revenue from operations for the first quarter grew 14.8 percent to 222.06 billion rupees.

Revenue from the copper businesses plunged 47.4 percent to 27.97 billion rupees, while revenue from its oil & gas business soared 41.5 percent to 32.19 billion rupees. Meanwhile, the miner’s aluminum segment posted a 62.5 percent surge in quarterly revenue.

Shares in Vedanta ended 1.2 percent lower, in a Mumbai market .NSEI which closed 0.3 percent higher.

Reporting by Krishna V Kurup in Bengaluru; Editing by Vyas Mohan and Sherry Jacob-Phillips

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