UPDATE: Sterlite Industries 3Q Net Profit Falls 17% On Higher Cost, Forex Loss

Sterlite Industries Ltd. (500900.BY) Monday posted a 17% drop in consolidated net profit for the third quarter because of higher depreciation and amortization costs as well as foreign-exchange losses.

Net profit for the October-December period fell to INR9.14 billion from INR11.01 billion a year earlier, the Vedanta Resources PLC (VED.LN) unit said.

Indian base metals companies such as Sterlite are facing slowing growth in sales and profit, as London Metal Exchange prices have been falling for the past few months due to the European debt crisis and global economic worries.

Sterlite's results include those of units Hindustan Zinc Ltd. (500188.BY) and unlisted Vedanta Aluminium Ltd.

Sterlite's consolidated sales grew 23.5% to INR102.46 billion from INR82.94 billion on higher revenue from its major businesses, zinc and copper, though aluminum sales fell a tad.

Total costs increased to INR84.43 billion from INR66.03 billion.

The company said net profit was hit hard by a weakening of the rupee, which resulted in total foreign-exchange losses for the third quarter at INR4.25 billion.

Depreciation and amortization costs jumped to INR4.58 billion from INR2.49 billion, as it accounted for capitalization of a lead smelter and a few power generation projects in India.

Sterlite said copper cathode production at its south India smelter was 6.9% higher at 84,000 tons.

Aluminum production fell to 63,000 tons from 65,000 tons a year earlier, Sterlite said, but added that output at unit Vedanta Aluminium rose to 107,000 tons from 103,000 tons.

Power sales jumped to 1,559 million kilowatt-hours during the October-December period, from 245 million kilowatt-hours a year earlier. The company said it sold more power from its 2,400 megawatt Jharsuguda power plant in eastern India.

- By Prasenjit Bhattacharya, Dow Jones Newswires; 91-11-4356-3358; [e-mail]