Costlier coal burns down IMFA Q3 net by 55%

The net profit of Indian Metals & Ferro Alloys Ltd (IMFA) during October-December 2011 period plunged by 55 per cent to Rs 13.16 crore , marred by expensive thermal coal. The company had posted Rs 29.41 crore profit in the same period last year.

Thermal coal is a key requirement for ferro alloys industries after primary raw materials such as manganese and chromite, as power production constitutes upto 70 per cent of total output cost.

Even though IMFA has been allotted a coal block at Angul for its existing captive power plant having 138 Mw generation capacity, the company is yet to start exploitation and is currently depending upon outsourced coal to run the thermal power plant.

“Higher input costs, primarily of thermal coal, continued to put pressure during the quarter although being an integrated producer with access to captive chrome ore and electricity helped control erosion in margins,” Subhrakant Panda, managing director of IMFA said.

A softer rupee against the dollar during the period also provided support to the margins in the third quarter and helped boosting net sales, he added.

During October-December, the company's EBITDA (earnings before interest, tax, depreciation and amortisation) margins stood at 22.4 per cent as compared to only 9.2 per cent recorded in the July-September.

IMFA net sales also grew by 28.8 per cent to 294.27 crore in the third quarter, buoyed by export profits, according to a company statement.