OREANDA-NEWS. October 26, 2011. Sesa Goa Limited ("SGL" or the "Company") today announced its unaudited consolidated results for the second quarter ("Q2") and six months ("H1") ended 30 September 2011.

Unaudited Consolidated Financial Summary

(in crore, except as stated)

 

 

Quarter ended

Six months ended

 

2011

30 September

2010

30 September 2011 2010

Net Sales/Income from operations

790

917

2,899

3,331

Cash Profit (PBDT)

25

426

1,273

2,033

Net Profit (PAT)

1

388

842

1,692

Earnings Per Share*

Basic

Diluted

0.01

4.49

9.69

19.65

0.01

4.22

9.69

19.65

Sales

 

 

 

 

Iron Ore (million tonnes)

1.55

1.82

5.80

6.71

Pig Iron (‘000 tonnes)

65

84

123

138

- *Non annualised

 

 

 

 

- Iron ore sales is inclusive of captive consumption in Pig Iron Division (0.04 million tonnes in Q2 as compared to 0.11 million tonnes in the corresponding prior quarter)

Operating Performance

During Q2, iron ore sales were 1.55 mt as compared with 1.82 mt (1.37 mt excluding Orissa) in the corresponding prior quarter. During H1, sales were 5.80 mt as compared with 6.71 mt (5.65 mt excluding Orissa) in the corresponding prior period. Sales were benefitted by higher volumes at Karnataka prior to the imposition of the Karnataka mining ban.

On 26 August 2011, the Supreme Court ordered a ban on iron ore mining and direct sales in Karnataka. The Court has currently ordered a study by government agencies and also allowed the sale of inventory by e-auction through appointed agency.

At Karnataka, we sold 0.71 mt of iron ore in Q2, and 1.81 mt of iron ore in H1, as compared with 0.45 mt and 0.95 mt in the corresponding prior periods. At Goa, we sold 0.83 mt of iron ore in Q2, and 3.98 mt of iron ore in H1, as compared with 0.92 mt and 4.71 mt in the corresponding prior periods.

During Q2, iron ore production was 1.12 mt as compared with 2.88 mt (2.43 mt excluding Orissa) in the corresponding prior quarter due to the ban on mining in Karnataka announced on 26 August 2011, the discontinuation of operations at Orissa in November 2010, and most importantly, the planned reduction in inventories. During H1, production was 5.51 mt as compared with 8.61 mt (7.61 mt excluding Orissa) in the corresponding prior period.

During Q2, pig iron production was at 63,277 tonnes and sales volumes were at 64,611 tonnes a decline of 10% and 23% respectively as compared with the corresponding prior quarter. Sales and production volumes of pig iron in H1 was at 122,690 tonnes and 125,507 tonnes. The production & sales volumes were adversely affected by low availability of iron ore from Karnataka and due to lower demand from foundries.

Financial Performance

Cash Profit (PBDT) for Q2 and H1 were 25 crores and 1,273 crores, a decline of 94% and 37% respectively compared with the corresponding prior periods. The profit was impacted on account of decline in volumes, lower income from investments; higher interest cost and Mark to Market loss on foreign currency borrowings.

Acquired 51% stake Western Cluster Limited, Liberia ("WCL")

During Q2, we completed the acquisition of a 51% stake in three iron ore assets in Liberia, with a potential iron ore resource of over 1 billion tonnes, for a cash consideration of US\\$90 million. The Legislature of the Republic of Liberia has ratified the Mineral Development Agreement ("MDA") for the Western Cluster Project.

Liquidity and Investment

As at 30 September 2011, the Company had cash and cash equivalents of 1,065 crores consisting of 1,041 crores in debt mutual funds and 24 crores in fixed deposits and cash with banks.

Expansion Progress

Expansion of the pig iron capacity to 625 ktpa and the associated expansion of metallurgical coke capacity to 560 ktpa are nearing completion for commissioning by Q3 FY 2012.