The Hindu Business Line : Sterlite Q2 net profit falls 28%

Mumbai, Oct. 30 Sterlite Industries, a Vedanta Group company, has registered a 28 per cent drop in net profit at Rs 1,240 crore in the second quarter ended September 30, 2009, against Rs 1,721 crore recorded in the same period last year. Sales revenue was down seven per cent at Rs 6,085 crore (Rs 6,594 crore).

Aluminium output was impacted by the ramp down of production at the high-cost Balco-I smelter to 62,892 tonnes from 90,846 tonnes. The company has maximised returns by selling surplus captive power from Balco-I in the commercial market. Revenues from aluminium business were down 44 per cent to Rs 629 crore (Rs 1,117 crore).

The various cost control measures adopted by the company seem to have started yielding positive results with the unit cost of production at Balco-II reducing to $1,347 a tonne in the first half of the fiscal compared with $1,796 a tonne in the same period last year.

“The positive impact of lower operating cost was more than offset by the lower LME aluminium prices and the lower production volumes due to the complete ramp down of Balco-I smelter,” the company said in a press release.

The average LME aluminium prices dipped 35 per cent to $1,819 a tonne during the quarter under review.

Copper down

Revenues from copper business in Q2 were down five per cent at Rs 3,564 crore (Rs 3,733 crore). Copper cathode production at Tuticorin was higher at 91,258 tonnes (81,160 tonnes). Mined metal production at the company’s Australian mine was lower at 5,235 tonnes (5,618 tonnes) in the period under review.

“The production was impacted due to a mud rush in the mine resulting from unprecedented rainfall in August. The mine has resumed production and is progressively expected to attain rated capacity soon,” it said.

Zinc and lead mined metal production was at 192,517 tonnes (152,226 tonnes) and 375,359 tonnes (306,759 tonnes) respectively in the quarter under review. Revenues were augmented by the sale of 22,359 tonnes of surplus zinc and 21,057 of surplus lead concentrate.

Saleable silver production was 30,324 kg, an increase of 40 per cent compared with the corresponding period last year. Revenues for the quarter were up marginally at Rs 1,768 crore (Rs 1,721 crore).

“The positive impact of higher volumes and rupee depreciation on sales and EBIDTA was more than offset by the sharp decline in the zinc and lead LME prices and lower by-product realisation,” the company said.

Consolidated cash, cash equivalents and liquid investments as on September 30, 2009 was Rs 24,213 crore. The portfolio is conservatively invested with debt mutual funds and in cash and fixed deposits with the banks.

The company’s shares were up three per cent at Rs 772 on Friday.

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