IMFA posts Rs 174 cr net profit in Q4 on higher ferro chrome prices

Indian Metals & Ferro Alloys Ltd (IMFA), a leading integrated producer of ferro chrome logged a net profit of Rs 174 crore in Q4 of 2016-17 compared to a loss of 37.29 crore in the corresponding period of FY16. For the entire financial year 2016-17, IMFA's net profit was Rs 249.83 crore.

A sharp appreciation in ferro chrome prices bolstered the company's earnings in the March quarter. In this period, IMFA's topline more than doubled from Rs 207.51 crore to Rs 594.17 crore. Exports in the period also surged three-fold from Rs 173.86 crore to Rs 524.33 crore.

In the January-March quarter, IMFA's ferro chrome production saw a spike of 92 per cent from 30,904 tonne to 59,391 tonne. Sales, too, were up by 48 per cent from 38101 tonne to 56578 tonne. Overall ferro chrome production by IMFA in 2016-17 shot up 25 per cent to 0.23 million tonne from 0.18 million tonne in the year-ago period. Total revenue in 2016-17 rose from Rs 1226.53 crore to Rs 1697.04 crore, a rise of 38.3 per cent.

Subhrakant Panda, managing director and chief executive officer, IMFA said, "The fourth quarter has indeed been exceptional due to the sharp increase in prices. However, this should not detract from the significant improvement in operational performance which has enabled us to reap the benefit of higher prices. We have registered a new high on every single front - ore raising, power generation, ferro chrome production & exports - which is indeed commendable."

IMFA expects the next one to two quarters to be challenging but overall outlook continues to be good driven by strong demand for stainless steel. IMFA is also battling a phase of uncertainty with its chromite mining operations stopped for a month.

"We have addressed the issues raised in the showcause notice and expect to be able to restart mining operations soon. We have also sought the intervention of the High Court in order to resolve the matter expeditiously", Panda said.

IMFA's mining operations at Sukinda and Mahagiri have been stopped due to withdrawal of consent to operate by the State Pollution Control Board (SPCB).