Sterlite Industries (India) Ltd. (STLT), the nation’s biggest copper producer, reported a 27 percent decline in first-quarter profit as costs increased and prices of base metals fell amid waning global demand.
Group net income fell to 12 billion rupees ($215 million), or 3.57 rupees a share, in the three months ended June 30 from 16.4 billion rupees, or 4.73 rupees, a year earlier, the unit of Vedanta Resources Plc (VED) said today in a statement to the stock exchanges. The median profit of 26 analyst estimates compiled by Bloomberg was 11.5 billion rupees. Sales rose 8 percent to 105.9 billion rupees.
The company that also produces aluminum had to cut prices following declines on the London Metal Exchange. Aluminum, used to make products from aircraft to beverage cans, averaged 23 percent lower, while copper fell 14 percent in the last quarter on the LME. The rupee fell 8.6 percent in the three months ended June 30, the worst performance among Asian currencies, according to data compiled by Bloomberg.
The shares of Sterlite fell 2.9 percent to 97.45 rupees at close of trading in Mumbai, the lowest level in more than a month. The stock has risen 8.6 percent this year, compared with a 7.7 percent increase in the key Sensitive Index. The results were announced after market hours.
Sterlite’s total expenses gained 21 percent to 90.8 billion rupees in the period. The cost of power and fuel surged 14.5 percent to 11.2 billion rupees.
On July 20, Hindustan Zinc Ltd. (HZ), the nation’s largest producer of the metal and a unit of Sterlite, reported a 6 percent gain in profit in the three months ending June 30. The earnings were highest in five quarters and beat analyst estimates.
Billionaire Anil Agarwal, who owns the Vedanta group, plans to combine its publicly traded Indian units Sterlite and Sesa Goa Ltd. (SESA), the nation’s top iron ore exporter, into a new company, the London-based company said on Feb. 25. Shareholders at Sesa Goa and Sterlite approved the plan last month, Vedanta Resources said in a statement on June 25.
To contact the reporter on this story: Abhishek Shanker in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Rebecca Keenan at email@example.com