UPDATE: Sterlite Industries 1Q Net Profit Jumps 50% To INR10.08 Billion
July 26 2010 - 9:20AM
Dow Jones News
Sterlite Industries Ltd. (500900.BY) Monday said higher product
prices helped it post a 50% increase in first quarter consolidated
net profit, but its results still fell short of market
expectations.
The unit of London-listed Vedanta Resources PLC (VED.LN) saw its
net profit rise to INR10.08 billion in the April-June period from
INR6.73 billion a year earlier, while sales climbed to INR59.25
billion from INR45.80 billion.
The average of estimates in a Dow Jones Newswires poll of seven
analysts was for net profit of INR11.22 billion on net sales of
INR65.06 billion.
Base metals companies have benefited from rising product prices
over the past few months, led by a revival of industrial activity
in emerging markets. Metal prices in India usually closely follow
international price trends.
In the quarter through June, the price of the benchmark
three-month aluminum contract climbed 41% to $2,092/ton on the
London Metal Exchange, while copper prices rose 50% to
$7,011/ton.
In addition to higher product prices, Sterlite's earnings were
boosted by a sharp rise in other income to INR6.91 billion from
INR3.78 billion a year earlier. The company didn't give a reason
for the increase.
Total costs rose to INR46.90 billion in April-June from INR36.64
billion, largely due to a 21.4% rise in raw material costs to
INR29.24 billion, the company said.
Sterlite's cash and liquid investments, which include bank
deposits and debt mutual funds, totaled INR248.74 billion as of
June 30.
The company's aluminum production fell 12.5% in the first
quarter to 63,000 tons, though production at Vedanta Aluminium, in
which it holds a 29.5% stake, rose to 77,000 tons from 53,000 tons
a year ago.
Production of copper cathodes also edged lower to 77,000 tons
from 78,000 tons because of a planned maintenance shutdown of
smelters for 22 days, which began on June 22, the company said.
Sterlite added that its 325,000 tons a year aluminum smelter in
Chhattisgarh is likely to start operations in the fiscal fourth
quarter, while it expects to complete construction of its 100,000
tons a year lead smelter in Rajpura Dariba, Rajasthan, this
quarter.
The company also sold 480 million kilowatt-hours of power during
April-June, up from 287 million kilowatt-hours the previous
quarter.
Sterlite is setting up a coal berth in south India's Vizag port,
in partnership with Leighton Contractors (India). The joint venture
will invest an estimated INR5 billion in the project, which is
expected to be completed by mid-2012, the company said.
-By Swansy Afonso, Dow Jones Newswires; 91-22-61456-106;
swansy.afonso@dowjones.com
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