Sesa Goa on Tuesday reported a 208% growth in its net profit to Rs 1,304.50 crore for the quarter ended June 31, 2010, compared with Rs 424.10 crore in the corresponding quarter last year.
Net sales during the quarter stood at Rs 2,413.08 crore, up 139% as against Rs 1,011.52 crore in the year-ago period. ?We have seen a very good increase in our bottom line, primarily driven by sales price this quarter,? PK Mukherjee, MD of Sesa Goa, said during an analysts’ call on Tuesday. Sesa Goa shares on Tuesday were up 1.11% to close at Rs 352.25 on the Bombay Stock Exchange.
During Q1, the company produced and sold 6.4 million tonne and 5.4 million tonne of iron ore, an increase of 36% and 15%, respectively, compared with the corresponding quarter last year. According to the company, the increase in production was on account of Dempo’s operations, which contributed 1.3 million tonne in production and 1.2 million tonne in sales. However, sales volumes were negatively affected by forest permit-related issues in Karnataka and logistics constraints in Orissa, the company said.
During the quarter, pig iron production was at 70,000 tonne. Sales volume decreased by 24% to 54,000 tonne compared with the corresponding prior quarter due to lower demand from foundries.
Cash profit (PBDT) during the quarter under review stood at Rs 1,606.83 crore, an increase of 205% compared with the corresponding prior quarter. The positive impact of increased iron ore spot prices in Q1 and higher sales volumes were partly offset by the increase in export levies, railway freight and royalty rates.
?Post August 13, 2009, there has been a 10% ad valorem royalty on iron ore. Railway freights have also increased, imposing an increase of Rs 900 per tonne for iron ore,? said Mukherjee during the conference call.
As on June 30, the company had cash and cash equivalents of Rs 8,054 crore (excluding inter corporate deposit of Rs 1,000 crore), consisting of Rs 6,495 crore in debt mutual funds and Rs 1,559 crore in fixed deposits and cash with banks.