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Web Exclusive | January 2013

Sesa Goa faces sharp decline in revenue

Revenue of Sesa Goa declined to less than one-tenth to Rs 227.5 crore during Oct-Dec 2012 from the year-ago period because of absence of iron ore production in Goa and Karnataka.

The Supreme Court banned ore mining in these states because of allegations of large scale irregularities.

The company's revenue declined 21.1 percent from the September quarter. The company’s metallurgical coke and pig iron businesses did contribute, but they are relatively small businesses when compared with iron ore.

In the December quarter, the firm incurred a loss of Rs 165.7 crore compared with a net profit of Rs 160.9 crore in the preceding three months.

The firm posted loss mainly because of a foreign exchange fluctuation-related loss of Rs 25 crore, compared with a gain of Rs 166 crore in the preceding quarter.

Meanwhile, the company plans to invest in its Liberian iron-ore mining project, spending about $350 million in the next 18 months, to bring the first phase of 4 million tonne capacity on stream. The first shipments are expected in end-2013-14.

One key event that is awaited in the near term is the resumption of mining in Karnataka—Sesa Goa’s mines fall in the category B mines, which are next in line to reopen. That can immediately contribute to revenues and profits. But mining in Goa may resume only after a long interval.

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