NMDC (526371) Q4 04/05 earnings summary

Executive summary

• FY 2004-05 delivered record PBT of ₹1,223.65 crore and PAT of ₹755.44 crore; higher iron ore prices and strong China-led demand supported results.

• Iron ore output rose 14.28% to 20.74 million tonnes; total iron ore sales increased 12.37% to 23.22 million tonnes.

Financial highlights

• Turnover reached ₹2,229.99 crore versus ₹1,453.69 crore in FY 2003-04; PBT nearly doubled to ₹1,223.65 crore from ₹616.02 crore.

• PAT was ₹755.44 crore versus ₹432.63 crore; EPS increased 74.59% to ₹57.16 and net worth rose 30.60% to ₹2,568.77 crore.

• Operating cash flow was ₹814.42 crore, while cash and bank balances rose to ₹1,904.82 crore from ₹1,091.61 crore.

• Reported profit was reduced by ₹91.12 crore from revised accounting policies, including mine-closure provision of ₹37.82 crore and construction, feasibility-study and depreciation adjustments.

Outlook and guidance

• Iron ore demand was expected to remain strong for the next two years, but elevated prices were considered temporary; plans focused on higher production and lower costs.

• Bailadila 11B was planned initially at 3 MTPA, rising to 7 MTPA, with commissioning targeted by end-2008 subject to statutory clearances.

• Kumaraswamy project, estimated at ₹294 crore, had renewed mining lease and environmental clearance; forest clearance remained in process.

• NISP’s Romelt-based construction was halted over technology and commercial issues; alternative technology selection and a 0.3 MTPA pig iron first phase were under consideration.