Sesa Goa Q3 profit down 28%; stays in green on Cairn leverage
New Delhi: Vedanta group firm Sesa Goa Thursday reported 28 percent decline in consolidated net profit at Rs 496.73 crore for the third quarter ended December 31, as several issues, including a mining ban in Goa, affected the company's performance.
The company managed to remain profitable in the quarter largely due to Rs 668.98 crore profit coming from its associate firm and oil major Cairn India. Sesa Goa holds 20 percent stake in the oil major.
Otherwise, the Goa-based company would have plunged to a consolidated net loss of Rs 172.25 crore in the quarter, its filing to the BSE showed.
A mining ban in Goa since September and continued mining ban in Karnataka have played the spoilsport for the company during the quarter.
Due to these factors, Sesa Goa's net sales plunged by 91.26 percent to Rs 227.54 crore during the quarter vis-a-vis Rs 2,604.28 crore of the October-December quarter of FY'12.
Iron ore sales -- Sesa Goa's mainstay -- were down to Rs 20.67 crore in the October-December period, compared to Rs 2,389.20 crore of the third quarter of 2011-12 as the company did not produce the mineral due to the ban.
"Iron ore mining operations in both Karnataka and Goa remain suspended due to regulatory restrictions. During Q3, approximately 0.03 million tonnes of iron ore was sold from Karnataka through court monitored e-auctions. There was no production or sale of iron ore during the quarter at the Goa operations," Sesa Goa said in a separate statement.
Mining in Goa has been stopped since September 11, when the state government ordered a temporary suspension on extraction of ore across Goa. On October 5, the Supreme Court ordered complete ban on mining, including transportation of mined ore from mines or stockyards.
"In view of the foregoing, operations at the Company's mines in Goa remain suspended. The Company has filed an application before the Supreme Court seeking modification or vacation of the aforesaid order. The hearing in the court is yet to commence effectively," it added.
Talking about Karnataka, it said that the apex court is in the process of resuming Category-B mines including company's mine and "we expect to commence mining in Karnataka, subject to receiving the court's and other necessary approvals".
The apex court-appointed Central Empowered Committee has already approved company's Reclamation and Rehabilitation plan at a provisional production capacity of 2.29 mtpa in Karnataka.
During the quarter, Sesa Goa acquired remaining 49 percent stake in Western Cluster Ltd in Liberia for a USD 33.5 million. Post this, it now controls 100 percent stake in the company.