Mining major Vedanta Resources today said it has entered the port sector by roping in the Australia-based Leighton Contractors to form a joint venture with its flagship firm Sterlite Industries.
The 74:26 joint venture Sterlite-Leighton has already bagged two projects worth Rs 900 crore from the Vizag and Paradeep ports, the company said on the sidelines of declaring its earnings for the quarter to June.
"We have entered the port business through a contract to develop a coal berth at Vizag on a revenue-sharing basis in a joint venture with Leighton Contractors India. An agreement has been signed with the Vizag Port authorities, and the estimated cost of the project, which is likely to be completed in mid-2012, is Rs 500 crore.
"The company, along with the joint venture partner Leighton, has also been awarded the project for development of a multipurpose berth on a revenue-sharing basis at the Paradeep Port. The indicative cost of the project is likely to be Rs 400 crore," Sterlite said in a statement.
Vedanta Resources Chief Financial Officer DD Jalan, during an analyst call conference, said, "the port business is being undertaken by subsidiary of Sterlite. Mines and Metals business and the port business is very much (interlinked)... and it will contribute to our growth."
Sterlite holds 74 per cent stake in the JV and rest is held by the Australian infrastructure firm.
The metals and mining group, which produces metals and minerals like copper, zinc, lead, iron ore, aluminium,bauxite, posted a 50 per cent jump in its net profit to Rs 1,008.43 crore for the first quarter of this fiscal on improved demand and better prices.
Going forward, Sterlite expects demand to grow for its metals. "We are positive on the outlook," Vedanta Resources Chief Executive MS Mehta said.
The company's total income on a consolidated basis for the reporting period stood at Rs 5,970.25 crore against Rs 4,580.16 crore in the year-ago period.
"The bottomline is below our expectations mainly because of the below-expected result of its group firm Hindustan Zinc," Centrum Broking Lead Analyst (Metals & Mining) Pawan Burde said.
Sterlite said it will issue bonus shares in the ratio of 1:1 on subdivided shares during the quarter. The company said that by the end of the first quarter, it has consolidated cash, cash equivalents and liquid investments amounting to Rs 24,874 crore. This included Rs 17,042 crore in debt mutual funds and Rs 7,832 crore in cash and fixed deposits with banks.
