Sesa Goa profit falls 21% on lower iron ore prices

Written by Bloomberg | Mumbai | Updated: Apr 25 2012, 09:17am hrs
Sesa Goa, Indias biggest iron-ore exporter, reported a 21% decline in fourth- quarter profit after prices and sales of the steelmaking ingredient plunged.

Group net income fell to 11.6 billion rupees ($220.5 million) in the three months ended March 31 from 14.6 billion rupees a year earlier, the Panaji, Goa-based unit of Vedanta Resources Plc (VED) said today in a statement. The median profit estimate of 25 analysts surveyed by Bloomberg was 10.4 billion rupees. Sales declined 23 percent to 30.3 billion rupees.

The cash price of 58 percent-content iron ore delivered to Tianjin port in China, the biggest consumer, averaged 16 percent lower in the last quarter from a year earlier, according to Steel Business Briefing. Output at Sesas mines tumbled in the last quarter because of transport delays in the western state of Goa and a mining ban in the southern state of Karnataka, it said in an exchange filing on April 10.

Sesa shares rose 0.5 percent to 182.35 rupees at the close of trade in Mumbai today. The earnings were announced after market hours.

Total expenses increased 18.4 percent to 18.3 billion rupees in the period on higher royalty. Raw material costs gained 9.1 percent to 1.4 billion rupees.

The companys iron ore output fell 11 percent to 4.9 million metric tons in the last quarter, while sales tumbled 21 percent to 5.2 million tons. Sesa halted its Karnataka mine after the nations top court in two separate orders in July and August banned mining in three iron-ore-rich regions of the province.

Billionaire Anil Agarwals Vedanta Resources will combine its publicly traded Indian units into a new company, the London- based company said on Feb. 25. Sesa will absorb Sterlite Industries (India) in an all-share deal.