Sterlite Profit Jumps 74% on Forex Gain, Zinc Unit Performance
Sterlite Industries (India) Ltd. (STLT), the nation’s biggest copper producer, posted a better-than- expected 74 percent increase in second-quarter profit boosted by earnings at its zinc unit and a foreign exchange gain.
Group net income rose to 17.4 billion rupees ($324 million), or 4.8 rupees a share, in the three months ended Sept. 30, from 9.98 billion rupees, or 2.97 rupees, a year earlier, the Vedanta Resources Plc (VED) unit said today in a statement to stock exchanges. The median profit of 26 analyst estimates compiled by Bloomberg was 12.2 billion rupees. Sales gained 9 percent to 110.3 billion rupees.
On Oct. 18, Sterlite unit Hindustan Zinc Ltd. (HZ), the nation’s largest producer of the metal, reported a 15 percent gain in profit in the three months ending Sept. 30 on higher silver and lead production.
Sterlite’s earnings before tax and interest from commercial power sales from a plant in the state of Odisha rose almost fourfold to 1.9 billion rupees, it said. The company, based in the southern city of Tuticorin, posted a foreign exchange gain of 2.2 billion rupees in the period.
The company posted an increase in profit even as prices of base metals such as aluminum fell. The average price of the metal, used to make aircraft and beverage cans, declined 20 percent to $1,950 a metric ton in the period from a year before. Copper fell 14 percent in the three months on the London Metal Exchange. The rupee fell 17 percent in the quarter, compared with the average rate a year earlier, according to data compiled by Bloomberg.
The depreciation of the Indian rupee compensated for declining metal prices, according to the earnings statement. Sterlite pegs its product sales in India to rates on the London Metal Exchange.
Sterlite fell 0.8 percent to 98.5 rupees in Mumbai today. The stock has risen 9.8 percent this year, compared with a 21 percent increase in the key Sensitive Index. The results were announced after market hours.
Sterlite’s total expenses increased 7.3 percent to 91 billion rupees in the period. The cost of power and fuel rose 17 percent to 12.2 billion rupees.
To contact the reporter on this story: Abhishek Shanker in Mumbai at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org