IMFA logs Rs 64 crore Q3 net on strong ferro-chrome prices

Potash mine
Higher ferro-chrome prices and improved business sentiment in China helped Indian Metals & Ferro Alloys Ltd (IMFA) post a net profit of Rs 63.87 crore for the quarter ended December 31, 2016. In the comparable period of last fiscal, IMFA had managed to turn a meagre profit of Rs 2.75 crore.

IMFA's topline rose 38 per cent in the period under review from Rs 335.35 crore to Rs 462 crore. Exports, too, looked up in the quarter as they expanded from Rs 266.48 crore to Rs 381.93 crore,  an increase of 43.3 per cent.

On the operational front, IMFA's performance was stellar was well. Its ferro-chrome output in the October-December quarter was up 24 per cent to 64,641 tonne, from 52,217 tonne in the year ago period. Total sales rose by 19 per cent from 53,764 tonne to 64,034 tonne.

Subhrakant Panda, managing director & chief executive officer, IMFA said, “After a long period of tepid demand and declining prices, there has been a noticeable turnaround in the ferro-chrome industry brought about by improved business sentiment in China, unviable ferro-chrome capacity being shut down and significantly higher chrome ore prices. The spurt in finished product pricing is only partly captured in the Q3 results as it came after long-term pricing for the quarter had been finalised.”

“However, the ongoing fourth quarter numbers will be exceptional. Though there is some cooling off happening, we believe prices are now moving into sustainable territory with healthy margins visible over the medium term. We are ideally positioned to reap the benefit of the turnaround and intend to use the gains to make our balance sheet even stronger”, he added.

Output during the quarter was at an all time high as all six furnaces were in operation and, aided by a spurt in ferro-chrome prices, boosted the company’s performance for the third quarter of FY17. There has been a broad rally in commodity prices and the benchmark price of ferro-chrome too has moved up sharply. However, the increase in spot prices came after long term pricing for Q3 had been finalised and is only partly reflected in the quarterly results.

For the April-December period of this fiscal, IMFA's net profit was Rs 75.83 crore compared to a loss of Rs 7.44 crore in the corresponding period of last fiscal. Revenue improved from Rs 1019.02 crore and exports were valued at Rs 923.05 crore as against Rs 883.27 crore in the year-ago period.

With operational chrome ore mines at Sukinda, Nuagiri and Mahasahi, IMFA has a rated capacity of 275,000 tonne per annum in ferro-chrome production. It has captive power generation capacity of 258 Mw.

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