What to expect from Sesa Goa in Q4

Moneycontrol Bureau

Iron ore miner Sesa Goa's fourth quarter performance will almost be a non event as its operations in Karnataka and Goa remained shut due to the ongoing mining ban.

According to a CNBC-TV18 poll, revenues will be down around 91 percent to Rs 240 crore and profit will also fall 35.6 percent to Rs 373 crore. EBITDA will be around Rs 100 crore versus Rs 993 crore YoY.

Revenues will come only from reduced pig iron ore sales and met coke sales as its pig iron ore plant is operating but at lower utilization due to unavailability of iron ore. Both combined contributed 15-20 percent of total revenues.

EBITDA will be Negative:

Fixed Costs Persists: Analysts estimate a fixed cost of Rs 30 crore and above on a monthly basis for both Karnataka and Goa.

Key issues to watch out

*Sesa Goa’s Western Cluster project is on track and is expected to deliver the first shipment in FY14

*The firm has also acquired the remaining 49 percent stake in Liberia’s Western Cluster project for USD 33.5 million

*It has to depend on the dividend from Cairn India and external financing to fund Liberia capex.

*The Supreme Court has recently lifted mining ban in Karnataka and  hearings in Goa mining case is on. Volumes in FY14 will improve on the back of iron ore resumption.

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