Vedanta Group firm Sterlite Industries today reported 22.27 per cent decline in consolidated net profit at Rs 934 crore for the quarter ended June 30, as it was hit by the closure of its Tuticorin copper smelter.
The company had reported a net profit of Rs 1,201.59 crore during the corresponding quarter of last fiscal.
Net sales of the company were also down 22.67 per cent to Rs 8,189.95 crore during the quarter under review as against Rs 10,591.39 in the corresponding quarter of previous fiscal.
It was primarily impacted by over 52 per cent fall in income from copper business segment, which stood at Rs 2,446.53 crore.
In a statement, the company said: “Revenues and EBITDA were lower primarily on account of a temporary closure of the Tuticorin copper smelter... (it) negatively impacted EBITDA by Rs 180 crore.”
The copper cathode production at the Tuticorin plant was down 82 per cent during the quarter as it resumed operations only on June 23.
The plant was closed due to a closure order by Tamil Nadu Pollution Control Board (TNPCB) of March 29. The National Green Tribunal (NGT), after hearing company’s appeal, passed an interim order on May 31, 2013 conditionally allowing the smelter to recommence operations.
On July 15, 2013, an expert committee confirmed that the plant meets the prescribed standards and on the same day, the NGT gave its final go ahead, enabling the plant to continue to operate.
Separately, the TNPCB has also filed an appeal against the NGT’s earlier interim order before the Supreme Court and the mater has not yet been concluded.
However, Sterlite chairman Anil Agarwal expressed satisfaction over company’s quarterly performance.
“We achieved a strong performance in the first quarter of FY14, and delivered production growth at our world-class zinc, silver, power and aluminium businesses despite global economic volatility and lower metal prices,” he said.
Sterlite’s results were also impacted by nearly 50 per cent increase in its interest outgo at Rs 361.88 crore and Rs 259.93 crore loss it incurred for its 30 per cent share in associate firm Vedanta Aluminium Ltd (VAL).
During the quarter, VAL’s alumina refinery in Odisha’s Lanjigarh remained closed but its aluminium production from the Jharsuguda smelter increased by 8 per cent at 134 kilo tonnes.
The company has reopened the alumina refinery earlier this month and the issue of extracting bauxite from the nearby Niyamgiri hills is being decided by the gram sabhas of that area.
Sterlite also said that it extended Rs 5,000 crore loan to VAL in the last quarter, “with an objective of optimising the overall cost of borrowings for VAL. This has resulted in retiring a part of the higher cost project finance debt at VAL.”