Sesa Goa net profit zooms three-fold

Sesa Goa, the country’s largest iron ore exporter, has posted a threefold rise in net profit at Rs 1,304 crore for the quarter ended June, as it sold more iron ore at a higher price than the previous corresponding quarter. The company had recorded a net profit of Rs 424 crore in the year-ago quarter.

Sales rose 15 per cent to 5.4 million tonne from 4.7 million tonne a year earlier. The company attributed the growth to higher production from new mines and acquisition of the assets of V S Dempo and Company in June last year.

The average realisation on sale of iron ore rose to $85 per tonne, compared to $37 a tonne a year earlier, on higher demand from China. Revenue more than doubled to Rs 2,413 crore, compared to Rs 1,011 crore a year earlier.

But the company expects the prices for iron ore to drop in the current quarter as the demand from China slows down. “The price for three months contract is also likely to come down in the current quarter,” said P K Mukherjee, managing director of the company, in a telephonic interview. The company plans to double its output to 50 million tonne in two to three years. But it is facing delays in securing permits in Karnataka and environment approvals in Goa.

“We may not achieve the expansion within the time line we expected it,” said Mukherjee. The company was expecting to achieve 30 million tonne production capacity by the end of this financial year, but that is not looking possible now. “We may have the capacity as we are developing the infrastructure, but we would not be able to produce it without requisite permission,” he said. Shares of the company closed at Rs 352, up by 1.1 per cent, on the Bombay Stock Exchange. Sensex, the benchmark index of the exchange, was down by 0.2 per cent.