Sesa Goa sales rise, profits decline in Q3 on higher export duty
Metal Stocks | 2012-01-26 05:58:51 | By Paul Ploumis
Sesa Goa Ltd, India’s largest producer and exporter of iron ore in the private sector has reported a decline of 37% in cash profit at 852 crore rupees (Rs) for Q3 of 2011-12 on account of higher export duty. However, the company has reported higher sales of 5.04 mt compared with 4.78 mt in the corresponding quarter previous fiscal.
MUMBAI (Scrap Monster): Sesa Goa Ltd, India’s largest producer and exporter of iron ore in the private sector has reported a decline of 37% in cash profit at 852 crore rupees (Rs) for Q3 of 2011-12 on account of higher export duty. However, the company has reported higher sales of 5.04 mt compared with 4.78 mt in the corresponding quarter previous fiscal.
Lower income from investments, higher interest cost, market to market loss on foreign currency borrowings also caused a dent in cash profits (Profit Before Depreciation and Taxes) in Q3.
During Q3, Sesa Goa Limited acquired 24,307,241 equity shares of Cairn India Limited )
and 4,500,000 equity shares of CIL were acquired by its subsidiary Sesa Resources Limited aggregating to approximately 1.5% of total paid up share capital of CIL from Cairn UK Holding Limited at an average price of ` 325 per share on the open market.
With this acquisition Sesa Goa Limited along with its subsidiary, Sesa Resources Limited holds 20% of the share capital of CIL effective 08 December 2011, and has accounted for CIL as an associate effective from this date.
During Q3, iron ore sales were 5.04 mt compared with 4.78 mt (4.36 mt excluding Orissa) in the corresponding prior quarter. During nine months period, sales were 10.83 mt compared with 11.49 mt (10.02 mt excluding Orissa) in the corresponding prior period.
Sesa Goa said in a statement: At Karnataka, we sold 0.64 mt of iron ore in Q3 via e-auctions, and 2.45 mt of iron ore for the nine months period, as compared with 0.63 mt and 1.57 mt in the corresponding prior periods.”
The statement added: At Goa, we sold 4.40 mt of iron ore in Q3, and 8.38 mt of iron ore in the nine months period, as compared with 3.74 mt and 8.44 mt in the corresponding prior periods.
During Q3, iron ore production was 3.33 mt compared with 4.70 mt (4.29 mt excluding Orissa) in the corresponding prior quarter. During nine months period, production was 8.84 mt as compared with 13.31 mt (11.90 mt excluding Orissa) in the corresponding prior period. The decline is mainly on account of the ban on mining operations in Karnataka and planned reduction in inventories. The ban was imposed by the Supreme Court of India on 26 August 2011 and continues to be in force.
During Q3, pig iron production was at 64,108 tonnes a marginal decline of 6% and sales
volumes were at 68,020 tonnes, an increase of 8% as compared with the corresponding prior quarter. Production and sales volumes of pig iron during nine months period was at 189,615 tonnes and 190,710 tonnes. The production & sales volumes were affected on account of low availability of iron ore from Karnataka and decline in the demand from foundries.