India: NMDC posts best-ever Q1 results, eyes 44 mn t of iron ore output in FY'22

India's largest iron ore producer, NMDC, registered record first-quarter performance in Q1FY'22. Key highlights of the investors' conference call are listed below:

• Co expects 44 mn t of iron ore production in FY'22: The company expects production of 44 mn t in FY'22 (new screening plant to add 2-2.5 mn t in Kirandul) and only a marginal rise in FY'23.
  
  

NMDC's current EC limit is 51.9 mn t and plans are afoot to expand it to 83 mn t. Kumarswamy mines cap is likely to be increased to 10 mn t from the current 7 mn t. Deposit 4 is allotted to NMDC. Also, CMDC, is in talks with the Odisha and Jharkhand governments for additional mining blocks.

• Iron ore production up 35%: The miner recorded iron ore output at 8.9 million tonnes (mn t) in Q1FY'22 as against 6.6 mn t in Q1FY'21. On a quarterly basis, output dropped 28% as compared to 12.3 mn t in Q4FY'21.
  
  
• Iron ore sales up 51%: NMDC's total iron ore sales increased 51% y-o-y to 9.4 mnt in Q1FY'22, as compared to 6.3 mn t in Q1FY21. The entire material of 9.4 mn t was sold in the domestic market.
  
  

NMDC's iron ore production and sales


Qty in mn t
Source: Company reports

• Average domestic realisation nearly doubles: The average domestic realisation stood at INR 6,813/tonne (t) for Q1FY'22 as against INR 2,845/t in Q1FY'21.
  
  
• EBIDTA up y-o-y: The company's EBITDA was recorded at INR 4,322 crore for Q1FY'22 as against INR 826 crore in Q1FY'21.
  
  
• Nagarnar plant demerger and commissioning: Commissioning and demerger of the 3-mn t integrated Nagarnar steel plant is expected in late Q3 or early Q4, with roll-out of flat products. The steel plant is being set up by NMDC, in Bastar district, Chhattisgarh.
  
  
• Coal mining operations in Jharkhand: The company expects to start coal mining operations in Jharkhand in Q2 or Q3 of FY'22.
  
  
• Monsoon impact: The company shared that demand slowed down due to monsoons. Otherwise, the outlook seems strong. Also, output in the coming month may be a little affected due to the monsoons.
  
  
• Plans to ramp up pellet capacity at Donimalai: The Donimalai pellet plant, after removal of technical issues, has resumed and is expected to produce at its full capacity of 1.2 mn t from Q3 FY'22 onwards. Also, the company is planning a 2-mn t pellet plant at the Nagarnar plant