Vedanta group firm Sesa Goa reported over 35% decline in its consolidated profit at INR 691.52 crore for the quarter ended December 31st 2011 due to slew of reasons, including higher export duty and losses incurred on foreign currency borrowings.

During Q3, iron ore sales were 5.04 million tonne compared with 4.78 million tonne (4.36 million tonne excluding Orissa) in the corresponding prior quarter. During nine months period, sales were 10.83 million tonne compared with 11.49 million tonne (10.02 million tonne excluding Orissa) in the corresponding prior period.

At Karnataka, it sold 0.64 million tonne of iron ore in Q3 via e auctions, and 2.45 million tonne of iron ore for the nine months period, as compared with 0.63 million tonne and 1.57 million tonne in the corresponding prior periods.

At Goa, it sold 4.40 million tonne of iron ore in Q3, and 8.38 million tonne of iron ore in the nine months period, as compared with 3.74 million tonne and 8.44 million tonne in the corresponding prior periods.

During Q3, iron ore production was 3.33 million tonne compared with 4.70 million tonne (4.29 million tonne excluding Orissa) in the corresponding prior quarter. During nine months period, production was 8.84 million tonne as compared with 13.31 million tonne (11.90 million tonne excluding Orissa) in the corresponding prior period. The decline is mainly on account of the ban on mining operations in Karnataka and planned reduction in inventories. The ban was imposed by the Hon‟ble Supreme Court of India on 26 August 2011 and continues to be in force.

During Q3, pig iron production was at 64,108 tonnes a marginal decline of 6% and sales volumes were at 68,020 tonnes, an increase of 8% as compared with the corresponding prior quarter. Production and sales volumes of pig iron during nine months period was at 189,615 tonnes and 190,710 tonnes. The production & sales volumes were affected on account of low availability of iron ore from Karnataka and decline in the demand from foundries.

Financial Performance
Cash Profit for Q3 and nine months period were INR 852 crores and INR 2,126 crores, a decline of 37% on both periods compared with the corresponding prior periods. The profit was impacted on account of higher export duty, lower income from investments; higher interest cost, and mark to market loss on foreign currency borrowings.

During Q3, Sesa Goa Limited acquired 24,307,241 equity shares of Cairn India Limited and 4,500,000 equity shares of CIL were acquired by its subsidiary Sesa Resources Limited aggregating to approximately 1.5% of total paid up share capital of CIL from Cairn UK Holding Limited at an average price of ` 325 per share on the open market.

With this acquisition Sesa Goa Limited along with its subsidiary, Sesa Resources Limited holds 20% of the share capital of CIL effective 08 December 2011 and has accounted for CIL as an associate effective from this date.

Expansion Progress
Expansion of the pig iron capacity to 625 ktpa and the associated expansion of metallurgical coke capacity to 560 ktpa are nearing completion for commissioning in current quarter, marginally behind expected timelines on account of construction delays.