Sesa Goa profit slumps, but anticipates upturn
22 October 2009
With its bottomline hit by low iron ore prices, Sesa Goa Ltd, India biggest iron ore exporter, plans to more than triple production to 50 million tonnes, as prices are on the rise again and Chinese demand is soaring.
P Mukherjee, managing director of Sesa Goa, told reporters in Mumbai, ''Prices are improving from this month.''
The company saw its profits and revenues fall a whopping 50 per cent and 38 per cent respectively, on a year-on-year basis for the September 2009 quarter even as it sold more iron ore and pig iron. Although the performance includes the numbers of Dempo Mining, acquired in June this year, the results were disappointing.
Profits were down largely due to lower realisations, driven by depressed international iron ore prices. On an average, Sesa Goa's realisations were down by about 50 per cent to $51 a tonne.
Sesa Goa sold 21 per cent more iron ore by weight in the quarter ended 30 September. Normally, that would have meant good news, since iron ore contributes to nearly 80 per cent of its turnover, with pig iron and metallurgical coke making up for the rest.
But a steep fall in iron ore prices in the past year due to the global economic slowdown negated the growth in volumes. Ore sales fell by 40 per cent in value, while consolidated sales declined by 39 per cent to Rs534 crore.