UPDATE: Sterlite Industries Profit Drops on Forex Loss, Interest Cost

-- First-quarter net profit 12.02 billion rupees vs 16.40 billion rupees

-- Sales rise to 105.91 billion rupees from 98.26 billion rupees

-- Forex loss 2.17 billion rupees, interest cost 2.42 billion rupees

(Adds details from 4th paragraph.)

By Prasenjit Bhattacharya

NEW DELHI--Sterlite Industries Ltd. (500900.BY) Thursday posted a 27% drop in its consolidated net profit for the fiscal first quarter, as the unit of London-listed Vedanta Resources PLC (VED.LN) took a mark-to-market loss on foreign-currency loans and incurred higher interest cost.

Net profit for the April-June quarter fell to 12.02 billion rupees ($214.6 million) from 16.40 billion rupees a year earlier. Sales rose 8% to 105.91 billion rupees from 98.26 billion rupees.

Sterlite said its net profit was hit by a forex loss of 2.17 billion rupees and a 47% rise in interest cost to 2.42 billion rupees.

Lower metal prices, a fall in zinc output, lower sale of surplus power by the aluminum division and higher cost of production in rupee terms also hurt the performance in the past quarter, the company said.

But, Sterlite said a fall in the Indian rupee's value partially offset a drop in product prices, which are pegged to the dollar.

A slowdown in global metal demand and lower international prices have been hurting Indian metal companies over the past six months. Metal prices in India mirror London Metals Exchange contract prices.

Its consolidated numbers include the results of units Hindustan Zinc Ltd. (500188.BY) and unlisted Vedanta Aluminium Ltd. and Sterlite Energy Ltd.

Hindustan Zinc's net profit for the April-June period rose to 15.81 billion rupees from 14.95 billion rupees a year earlier, while sales fell to 27.12 billion rupees from 28.21 billion rupees.

Zinc output at Hindustan Zinc dropped 16% to 161,000 tons in the April-June quarter, while its lead output rose to 31,000 tons from 16,000 tons.

Sterlite posted a 19% increase in the output of copper cathodes to 88,000 tons, while its aluminum output fell 1% to 60,000 tons.

Vedanta Aluminium posted an 11% increase in aluminum output to 124,000 tons.

In its power business, Sterlite posted a 49% rise in sales to 2,458 million kilo-watt hours.

As of June 30, the company had consolidated cash, cash equivalents and liquid investments of 249.17 billion rupees.

Write to Prasenjit Bhattacharya at [e-mail]

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