OREANDA-NEWS. July 21, 2011. Sesa Goa Limited ("Sesa Goa" or the "Company") announced its results for the first quarter ("Q1") ended 30 June 2011.

Unaudited Consolidated Financial Summary

 

 

(in crore, except

as stated)

 

Quarter Ended 30 June

 

 

2011

2010

Change

Net Sales/Income from operations

2,109

2,413

(13%)

Cash Profit (PBDT)

1,249

1,607

(22%)

Net Profit (PAT)

841

1,305

(36%)

Earnings Per Share

 

 

 

Basic

9.67

15.17

(36%)

Diluted

9.67

15.17

(36%)

Sales

 

 

 

Iron Ore (million tonnes)

4.3

4.9

(12%)

Pig Iron ('000 tonnes)

58

54

7%

Iron ore sales is inclusive of captive consumption in Pig Iron Division (0.07 million tonnes in Q1 FY 2012 as compared to 0.07 million tonnes in previous year)

All iron ore volumes are reported on a dry metric tonne (DMT) basis as against earlier basis of wet metric tonne (WMT), as international sale prices are quoted in DMT.

Operating Performance

During Q1 iron ore production and sales were 4.4 million tonnes and 4.3 million tonnes respectively. The decrease in production and sales compared with Q1 FY2011was primarily on account of termination of the third party mining agreement in Orissa and logistical constraints in Goa.

Hon'ble Supreme Court has stayed the export ban of the State Government of Karnataka from 20 April 2011. Despite the orders, permits for transportation of iron ore for exports have still not been issued. Meanwhile, we have increased sales in the domestic market significantly. However, the export ban constrained our full capacity utilization in Karnataka.

During Q1, pig iron sales volumes increased by 7% at 58,079 tonnes, while production declined by 11% at 62,230 tonnes as compared with the corresponding prior quarter. The decline in production is mainly due to the reduced availability of high grade iron ore from Karnataka.

Financial Performance

Cash Profit (PBDT) for Q1 was at 1,249 crore, decrease of 22% as compared with the corresponding prior quarter. The positive impact of higher iron ore prices was more than offset by the higher export duty and logistics costs.

Acquired 18.5% Stake in Cairn India Limited ("CIL")

During the quarter, the Company acquired 8.1% of the share capital of CIL through open offer. Thus, post the open offer, Sesa Goa has 18.5% stake in Cairn India Ltd — with 10.4% of shares acquired from market at the beginning of this quarter.

Expansion Progress

The iron ore capacity expansion programme is on track for completion by the end of FY 2013. Expansion of the pig iron capacity to 625 ktpa and the associated expansion of metallurgical coke capacity to 560 ktpa are progressing well for commissioning by Q3 FY 2012.

Liquidity and Investment

As at 30 June 2011, the Company had cash and cash equivalents of 2,246 crores consisting 2,058 crores in debt mutual funds and 188 crores in fixed deposits and cash with banks. The Company follows a conservative investment policy and invests in high quality debt instruments.