Sterlite Industries, the country’s largest copper producer, recorded a net profit of Rs 732 crore for the quarter ending December 2008, a 38 per cent decline over the corresponding period last year. The decline in profit was attributed to a fall in metal prices and global credit crisis and economic slowdown.
Revenue of the company, including those of subsidiaries, declined by a 15 per cent to Rs 4,445 crore in the quarter, even though the production of copper cathode was “almost flat” in the quarter at 77,000 tonnes.
A 46 per cent decline in the copper price on the benchmark London Metal Exchange (LME) in September to December quarter pulled down the revenue, said the company in a statement. On Friday, copper was priced at $3,050 a tonne at LME, a 66 per cent decline from the all-time high of $8,985 on 3 July.
Its aluminum-producing subsidiary Bharat Aluminum Company (Balco) and zinc and lead-producing unit Hindustan Zinc (HZL) also contributed less revenue on account of lower metal prices — pulling the total down by a 15 per cent. Aluminum price was down by 25 per cent in the quarter while zinc and lead prices were down by 55 per cent and 62 per cent respectively, said the company in the statement.
Sterlite expects the cost of production for aluminum and zinc to come down in the coming quarter. The cost of production for aluminum in the third quarter was down to $1,642 a tonne from $1,969 a tonne in the preceding quarter.
“Going forward, we expect the trend of reduction in costs to continue and expect to be able to achieve a further reduction in cost of production in the last quarter of financial year 2009,” the company said.
The company said that it has cash and cash equivalents worth Rs 19,034 crore including Rs 14,300 crore in debt mutual fund. It also said that the expansion plan for its subsidiaries Balco and Hindustan Zinc was on schedule. In an analyst conference-call, the company also said that it was still in talks with the US-based miner Asarco after lowering down the bid price from earlier $2.6 billion.
At Friday’s closing price of Rs 239.45 a share, the stock was down by 75 per cent on Bombay Stock Exchange from 52-week high of Rs 954 on June 2, 2008.
