NMDC Limited
NSE Symbol NMDC
RESULTS COMPARISON
FY10, FY09,FY08
NMDC faced certain serious challenges in FY10. According to a press release dt 06.07.2010, “the year 2009-10 was a year of challenges for NMDC. In the beginning of the financial year, May 2009, the Essar pipeline was blasted by the Maoists at several places, placing NMDC under great strain on evacuation of iron ore. The pipeline was an additional means of evacuation from Bailadila to Visakhapatnam for 7 to 8 million tonnes of fines, constituting about one-third of the total despatches from NMDC’s Bailadila projects. The Company did all that it could do to compensate for the loss of sales and production caused by this disruption. The Railway was co-operative enough to augment wagon supplies. Road transport was also resorted to. The result was that in 2009-10 NMDC was successful of making a sale of about 25 million tonnes of iron ore, and the turnover touched Rs.6239 crore, with a PBT of Rs 5207 crore”.
So, this factor must be taken into account in evaluating the performance of NMDC for FY2010.
Net Sales have come down by 17.5% to Rs.6239.09 Cr in FY10 from Rs.7564 Cr in FY09, but is up by 9.2% compared to Rs.5711 Cr of FY 08.
Total Expenditure has gone up by 5.2% to Rs.1893.48 Cr in FY10 compared to Rs. 1799.84 Cr in FY 09 and by 32% compared to Rs.1434.37 Cr in FY 08.
Net Profit is down by 21.2% to Rs.3447.26 Cr in FY10 compared to Rs.4372.38 Cr in FY 09 but up by 6% compared to Rs.3250.98 Cr in FY 08.
Dividend has therefore been reduced to 175% on a face value of Rs.1 in FY 10 compared to 221% in FY 09.
Basic EPS is down to Rs.8.69 in FY 10 from Rs.11.03 in FY 09 on the face value of Rs.1. In FY 08, the Face value was Rs.10 and the EPS was 245.99.
The public holding in the company is still low at 10%. Hence, NMDC is a good candidate for further Equity offer by Government – under the Minimum public shareholding of 25% planned by Government.
Regarding the operations in Q1 of FY11, NMDC in the press release dt 6.7.2009 has stated as below :
“Even in the current year, 2010-11, the operation of the slurry pipeline has not been restored, and NMDC is almost exclusively evacuating its material through Railways. Thanks to the continued co-operation of the Railway, NMDC could perform much better in the first quarter of this financial year in comparison with that of the previous year. NMDC is grateful to the Railway for augmenting wagon supply and to the customers for their patience and diligence in organizing suitable lifting of the material from the pitheads of NMDC mines.”
The next aspect is pricing of IRON ORE – and also its export, which has been a matter of contention between the miners and steel makers in India.
The latest press release deals with this issue as below :
“…Pricing of iron ore has been a delicate subject….. With effect from 1 April 2010, a new price agreement was due. In order to make a new pricing system that is more realistic and more transparent and more equitable, the company took advice of an internationally renowned Consultant, M/s CRU Strategies of London. The CRU report has given a number of suggestions, which were considered by a high power sub-committee of the Board of Directors, and a new pricing formula was evolved, giving relief to the domestic steel producers to the extent possible. The prices to be charged from long-term customers would now be determined not only by deducting from the FOB value of exports the expected Railway freight (unlike domestic railway price as in the past) and royalty but also by offering them a fixed discount of 5% over and above the pithead price so arrived at. In order to protect the domestic customers from the volatility of international market (based on which prices are now fixed every quarter), it has been decided that only in the case of increasing prices only two-thirds of the increase will be passed on to the customers and the remaining part would be absorbed by the company. In order to insulate the customers from the exchange rate variation, the exchange rate of Rupee in terms of Dollar has been kept as on 1 April with this month’s forward cover. These measures would give certain relief to the domestic customers when international prices of iron ore go extremely high.
The year ahead holds much promise to NMDC. The commissioning of a new mine, ie, Bailadila-11/B, is expected by the end of this year. Despatches are likely to improve, bringing in better realization, higher turnover and better profit. NMDC, it is hoped, will excel its performance through the next three quarters and achieve all-time high records.”
From the above – we find that NMDC will perform much better in the 2nd-4th Qtrs of FY11.
NEW PIPELINE OF 424 KM : NMDC is planning to invest Rs 3,000 Crores to set up a 12 million-tonne per annum pipeline of 424-km between Bailadila mines in Chhattisgarh and Vizag port to help in evacuation of products that are affected due to damage to the existing pipeline. It will be along highways and likely to be completed by October 2012.
Q1 FY 11: NMDC CMD has said that NMDC may clock all time high sales of around Rs 2,400 crore in the first quarter of current fiscal (2010-11) despite bottleneck in evacuation - mainly due to a hike in iron ore prices and a 20% increase in sales volume. The profitability (both pre and post tax) of the company is also expected to rise by 80%.
NEW PLANS : It is also planning to go into steel production and other related areas. Thus, NMDC is expected to go from strength to strength in production and profitability – in the years to come.
STAND ALONE FIGURES FOR 3 YEARS :
FY10(lakhs) | dif%1 | dif%2 | |||
Net Sales | 623909 | 756403 | -17.5 | 571131 | 9.2 |
Other Optg Income | - | - | 67053 | ||
SIT & WIP | 190 | -12739 | -101.5 | -3017 | -106.3 |
Raw Materials | 20945 | 21352 | -1.9 | 17533 | 19.5 |
Traded goods | - | - | - | ||
Employees Cost | 41951 | 42110 | -0.4 | 35562 | 18 |
Depreciation | 7662 | 7702 | -0.5 | 6000 | 27.7 |
Other Expenditure | 118600 | 121559 | -2.4 | 87359 | 35.8 |
Total Expenditure | 189348 | 179984 | 5.2 | 143437 | 32 |
Profit-Operations | 434561 | 576419 | -24.6 | ||
Other Income | 86171 | 88404 | -2.5 | ||
P B I &EI | 520732 | 664823 | -21.7 | ||
Interest | - | - | - | ||
Pr. Af.Int be. EI | 520732 | 664823 | -21.7 | ||
Exceptional items | - | - | - | ||
P B T | 520732 | 664823 | -21.7 | 494747 | 5.3 |
Tax Expense | 176006 | 227585 | -22.7 | 169649 | 3.7 |
P A T | 344726 | 437238 | -21.2 | 325098 | 6 |
Extrao. Items | - | - | - | ||
Net Profit | 344726 | 437238 | -21.2 | 325098 | 6 |
Dividend (%) | 175 | 221 | -20.8 | - | |
Face Value-Rs | 1 | 1 | 0 | 10 | -90 |
Paid-up Equity | 39647 | 39647 | 0 | 13216 | 200 |
Reserves | 1387596 | 1124044 | 23.4 | 815749 | 70.1 |
Basic EPS | 8.69 | 11.03 | -21.2 | 245.99 | -96.5 |
Public holding (%) | 10 | 1.62 | 517.3 | 1.62 | 517.3 |
ANNOUNCEMENTS
TO THE EXCHANGE
05-07-2010 NMDC Limited has informed the Exchange that the Annual General Meeting of the Company will be held on August 05, 2010. The Register of Members and Share Transfer Books of the Company will remain closed from July 31, 2010 to August 05, 2010 (both days inclusive), for the purpose of holding the Annual General Meeting of the Company for the year 2009-10 and for the purpose of determining the eligible share holders / beneficial owners for payment of dividend. Dividend, if declared by the Members would be paid within 30 days from the date of such declaration.
01-07-2010 Nmdc Limited has informed the Exchange that the Merger Order passed by Ministry of Corporate Affairs (MCA) for merger of Sponge Iron India Limited (SIIL) with NMDC Ltd., has been filed on July 01, 2010 with Registrar of Companies, Andhra Pradesh, Hyderabad, within the stipulated time. Consequent upon filing, SIIL stands merged with NMDC with effect from July 01, 2010 without being wound up in terms of the Orders of Ministry of Corporate Affairs, Government of India dated January 18, 2010 and May 24, 2010. -
08-06-2010 Nmdc Limited has informed the Exchange that the Ministry of Corporate Affairs (MCA) has passed an Order dated May 24, 2010 for merger of SIIL with NMDC LTD., granting the time upto July 2, 2010 to file the Merger Order dated January 18, 2010 with the Registrar of Companies, Andhra Pradesh, Hyderabad.
22-05-2010 Nmdc Limited has informed the Exchange that the Board of Directors of the Company at its Meeting held on May 22, 2010 have recommended a final dividend of Re. 1/- per share of Re. 1/-, in addition to the interim dividend of Re. 0.75 (paid in Feb 2010) per share of Re. 1/- for the year 2009-10.
27-03-2010 Members of the Exchange are hereby requested to note the following regarding the offer for sale of 33,22,43,200 equity shares of Re.1/- each of NMDC Limited by the President of India : 'The Depositories (NSDL and CDSL) have informed the Exchange that credits to the respective accounts have been carried out'. -
17-03-2010 Nmdc Limited has informed the Exchange that the Company has filed the Prospectus with the Registrar of Companies, A.P., Hyderabad (ROC) for a Further Public Offer of 332,243,200 Equity Shares of Re.1/- each by way of an Offer for Sale by the President of India, acting through the Ministry of Steel, Government of India.
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