Sesa Goa (SGL) held a conference call to discuss quarterly and yearly results and future growth plans. P. K. Mukherjee, Managing Director and CEO addressed the call.
Quarterly highlights
- Iron ore Sales increased marginally from 5.005 Million tonnes (Mt) during the quarter ended Mar’08 to 5.025 Mt during quarter ended Mar’09
- Metallurgical coke Sales decreased by 30% from 73000 tonnes during the quarter ended Mar’08 to 51000 tonnes during quarter ended Mar’09
- Pig Iron Sales increased by 4% from 68000 tonnes during the quarter ended Mar’08 to 71000 tonnes during quarter ended Mar’09
Yearly Highlights
- Iron ore Sales increased by 22% from 12.391 Million tonnes (Mt) during the quarter ended Mar’08 to 15.103 Mt during quarter ended Mar’09 (highest ever annual iron ore dispatches).
- Metallurgical coke Sales decreased by 17% from 260000 tonnes during the quarter ended Mar’08 to 217000 tonnes during quarter ended Mar’09
- Pig Iron Sales decreased by 16% from 266000 tonnes during the quarter ended Mar’08 to 224000 tonnes during quarter ended Mar’09
Highlights of the Call
- The company has a strong balance sheet with cash and cash equivalents of Rs 4143 crore.
- An aggressive exploration and drilling programme in Karnataka and Goa have yielded gross additions of 54 million tonnes and after considering mined output of 16 million tonnes during the year from all mines, a net addition of 38 million tonnes.
- Reserves and resources as on 31 March 2009 were 240 million tonnes compared with 202 million tonnes at the end of FY 2008 (in the mines that the Company hold on lease and/or right to mine).
- In terms of Geographical break up of sales of iron ore share of China, Japan, Europe, Pakistan and South Korea was 84%, 6%, 2%, 2% and 2% respectively. Balance were Domestic sales of around 4%.
- Targets a 20-25% growth in Iron ore volumes for the FY 2009-10.
- The price for 63-63.5% Fe grade iron ore is around US$ 51-53 per tonne (FOB) and US$ 64-65 per tonne (CIF). The price for 58% Fe grade iron ore is around US$ 35-40 per tonne (FOB), while that for the 56% Fe grade iron ore is just below US$ 30 per tonne (FOB).
- During the FY’09 the spot sales was around 80% and 20% was sales through long term contracts.
- During the 12 months period from Apr-Mar’09 the company has booked hedge loss to the tune of Rs 223 crore.
- The company has chalked out a capex plan to the tune of Rs 150-350 crore, over a period of next 12 –18 months depending on the market conditions.
- The ruling Pig iron ex-factory prices is around 17000 to 19000 per tonne, while that for the Metallurgical coke (Foundry grade) is around Rs 16500 to 17000 per tonne