Iron ore major Sesa Goa, a wholly-owned subsidiary of the Vedanta Group, posted a 36% drop in consolidated net profit for the first quarter of financial year 2011-12 (Q1FY12) at R841 crore compared with R1,305 crore in the corresponding quarter of FY11. Consolidated income during this period stood at R2,109 crore, de-growing by 13% from R2,413 crore in Q1FY11.
The decline in growth during the quarter was primarily caused by the decrease in production and sales of iron ore, on account of the termination of the thirdparty mining agreement in Orissa and logistical constraints in Goa, said the company in a statement to the BSE. During Q1, Sesa Goa?s iron ore production and sales were 4.4 million tonnes and 4.3 million tonnes respectively, while consolidated revenues from the segment stood at R1,936 crore for Q1FY12, dropping by 14.7% from R2,269 crore in the corresponding prior quarter. Meanwhile, income from metallurgical coke and pig iron were R140 crore and R163 crore, growing by 20.7% and 19% respectively, from R116 crore and R137 crore in the first quarter of FY11. During Q1, the company acquired 8.1% of the share capital of Cairn India through an open offer. Post the open offer, Sesa Goa has 18.5% stake in Cairn India, with 10.4% of the shares acquired from the market at the beginning of the quarter. In the quarter, Sesa Goa also increased its sales in the domestic market, though the export ban in Karnataka constrained its full capacity utilisation in the state.
The company statement mentioned, ?The Supreme Court has stayed export ban of the state government of Karnataka from April 20, 2011. Despite the orders, the permits for transportation of iron ore for exports have still not been issued, and the ban constrained the company’s full capacity utilisation in the state.?
Its iron ore capacity expansion programme is slated to be completed by the end of FY13, while the expansion of pig iron capacity to 625 ktpa and the associated expansion of metallurgical coke capacity to 560 ktpa are progressing well for commissioning by the third quarter of FY12, added the company.