INDUSTRY UPDATES ON 31.05.2013


INDUSTRY UPDATES ON 31TH MAY,2013

Suzlon down 8% as January-March net loss widens to Rs 1,913 cr




Shares of Suzlon Energy slumped as much as eight per cent in morning trade on the bourses as the wind turbine major’s net loss for the quarter ended March 31 widened to Rs 1,912.72 cr.

Suzlon Group’s net loss for the quarter ended March 31 has widened to Rs 1,912.72 crore compared to Rs 300.24 crore in the same quarter a year ago due to non-routine costs and a competitive global wind sector.

Reacting to the poor numbers, shares of the company opened on a weak note at Rs 12.90, then fell 7.51 per cent to Rs 12.06 on the BSE.

Similar movement was witnessed on the National Stock Exchange as well, where the stock opened at Rs 12.80, then lost further ground and fell 8.42 per cent to Rs 11.95.

The slump in the counter was due largely to the poor earnings, besides, the broader market was also trading in negative territory, down 223 points over its previous closing price.

“This has been a very disappointing quarter. We faced both significant internal challenges on the liability management front, and externally with a highly competitive global wind sector,” company’s Group Head of Finance Kirti Vagadia said.

Nalco stock hits 52-week low intra-day



Nalco stock on Thursday came closer to its 52-week low of Rs 32.70 as it touched day’s low at Rs 34.35, but finished at Rs 34.55, down 1.29 per cent on the BSE.

According to analysts, market took a dim view of the integrated metal maker. Its net profit margin on sale has been gradually declining in the past years. In FY13, it has come down to below 10 per cent.

A metal analyst at Ambit Capital told Business Line net-to-sales margin has dropped to around 9 per cent.

“It had already come down from 33 per cent in 2007-08 to 13 per cent in 2011-12,” said another stock analyst of an institutional brokerage. Had it not been for non-operational income, Nalco would have made a net loss before tax, industry observers pointed out.

Total capex for FY14 has been planned at Rs 1,740 crore including Rs 900 crore proposed payment for NPCIL project, which is not paid yet. Other capex would include second wind power mill (in Rajasthan), Utkal coal block, alumina refinery up gradation, joint venture with GMDC.

Some of the analysts, who attended conference call with the management on Wednesday, mentioned that the capex would reduce other incomes.

The management conceded that about 25 per cent of the total pots remained shutdown mainly keeping in mind the falling LME and uncertainty over coal supply. Though, the company believed, that for the full year 100 per cent linkage coal should be available, the distribution is likely to be erratic. Due to pot shutdown metal production is likely to be lower by 30 per cent in FY14.

US genetically modified wheat stokes fears, Japan cancels tender



A strain of genetically modified (GM) wheat found in the US fuelled concerns over food supplies across Asia on Thursday, with major importer Japan cancelling a tender offer to buy US grain.Other top Asian wheat importers South Korea, China and the Philippines said they were closely monitoring the situation after
 the US government found genetically engineered wheat sprouting on a farm in the state of Oregon.The strain was never approved for sale or consumption.



Asian consumers are keenly sensitive to gene-altered food, with few countries allowing imports of such cereals for human consumption. However, most of the corn and soybean shipped from the US and South America for animal feed is genetically modified.“We will refrain from buying western white and feed wheat effective today,” Toru Hisadome, a Japanese farm ministry official in charge of wheat trading, said.

The US Department of Agriculture (USDA) on Wednesday said the wheat variety was developed years ago by biotechnology giant Monsanto Co. It was never put into use because of worldwide opposition to genetically engineered wheat.



Wheat, long known as the staff of life, is the world’s largest traded food commodity and it is used in making breads, pastries, cookies, breakfast cereal and noodles.Asia imports more than 40 million tonnes (mt) of wheat annually, almost a third of the global trade of 140-150mt. The bulk of the region’s supplies come from the US, the world’s biggest exporter, and Australia, the No. 2 supplier.The USDA said there was no sign that genetically engineered wheat had entered the commercial market, but grain traders warned the discovery could hurt export prospects for US wheat.



“Asian consumers are jittery about genetically modified food,” said Abah Ofon, an analyst at Standard Chartered Bank in Singapore. “This is adding to concerns that already exist on quality and availability of food wheat globally.”In 2006, a large part of the US long-grain rice crop was contaminated by an experimental strain from Bayer CropScience , prompting import bans in Europe and Japan and sharply lowering market prices. The company agreed in court in 2011 to pay $750 million to growers as compensation.





ArcelorMittal completes sale of a 15pct interest in ArcelorMittal Mines Canada



Arcelor Mittal announced the completion of the previously announced investment by a consortium led by POSCO and China Steel Corporation to acquire a 15% joint venture interest in ArcelorMittal’s Labrador Trough iron ore mining and infrastructure assets in Quebec, Canada for USD1.1 billion.



The consortium completed its investment by acquiring a 3.95% interest in the joint venture for total consideration of USD 290 million in cash, increasing its interest in the joint venture to 15%, with ArcelorMittal’s wholly owned subsidiary ArcelorMittal Mines Canada retaining an 85% interest in the joint venture.

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