India: NMDC eyes 46-50 mnt of iron ore output in FY'24

NMDC, India's largest iron ore producer, recently announced its financial year (April 2022-March, 2023) results. The company reported its second-best iron ore production volumes in the preceding fiscal. Expected production in FY24 will be around 46-50 million tonne (mnt) as against the current volume of 41 mnt.

Notably, the mining major reported its best-ever fourth-quarter iron ore production in Q4FY23 (January-March, 2023) at 14.13 mnt.

Performance highlights:

• Iron ore production edges down 3% y-o-y: The miner recorded iron ore output at 40.82 mnt in FY23 as against 42.18 mnt in FY22.
  
  
• Iron ore sales fall 6% y-o-y: NMDC's total iron ore sales decreased 6% y-o-y to 38.2 mnt in the period under review compared to 40.6 mnt in FY22. The entire quantity of 38.2 mnt was sold in the domestic market.
  
  
• Average sales realisation falls: The miner's average sales realisation stood at INR 4,565/t in FY23, a fall of 28% y-o-y from INR 6,300/t in FY22.
  
  
• EBIDTA decreases y-o-y: The company's EBIDTA was recorded at INR 6,810 crore in FY23, dropping significantly as against INR 13,348 crore in the corresponding period last year (CPLY).
  
  
• PAT falls 41% y-o-y: NMDC's profit after tax (PAT) fell significantly by 41% y-o-y to INR 5,529 crore in FY23 compared to INR 9,448 crore in CPLY.
  
  

Highlights of the investors' call:

• No impact of export duty: The imposition of hefty export duties on iron ore by the Indian government in the previous fiscal has not impacted the miner as it does not have a presence in the export market. Also, NMDC has no plans for entering the export market in the near future.
  
  
• Capacity enhancement of Kumaraswamy mines: NMDC's plans to enhance the capacity of its Kumaraswamy mines in Karnataka to 10 mnt from the current 7 mnt which is expected to be completed by mid-FY24. The legal formalities for the same have been completed.
  
  
• NMDC to resume operations in Panna mines: According to officials, the Supreme Court has allowed NMDC to resume operation of its diamond mine in Panna, Madhya Pradesh. The operation was suspended as the environmental clearance for the mine came to an end on 31 December, 2020.