Post News Network
Bhubaneswar, Oct 4: Diversified global metal firm Vedanta Resources will focus on maximizing its cash flow with deleveraging its balance sheet in the current financial year on the back of meltdown on commodity prices. The company also said in its annual report that it will reduce its capital expenditure plan for this fiscal with more investment flowing into low risk, high return projects.
“In a volatile commodity price environment, Vedanta is revising capex (capital expenditure) downwards and prioritising capital to high-return, low-risk projects. This will maximise cash flows, giving the flexibility to invest further as oil prices improve,” the company said in its annual report.
Downward revision of capital expenditure will also take place in its Lanjigarh aluminium refinery unit, it noted. “We will continue to implement initiatives to contain capital expenditure and operating costs to maintain financial strength during this period of weaker commodity prices. At the same time we will preserve our portfolio of assets with attractive long-term growth prospects and a strong resource position. We also aim to maintain a strong balance sheet, with a focus on maximising free cash flows, deleveraging and returns to investors,” it added.
Listing out its priorities in operational front, the company said it will improve operating level of its aluminium units from present 38 per cent capacity. The company will also strive to secure a local source of bauxite for its refineries. Notably, Vedanta is facing issues in securing bauxite for its Lanjigarh unit in the state.
The company will also strengthen its balance sheet through reducing its overall debt level in the current financial year. A simple corporate structure will also be on company’s agenda during this year.
