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Iron ore producer NMDC Ltd today reported a 21% dip in net profit in the July-September quarter at Rs 1,318 crore on lower sales realisation due to subdued prices of the raw material even as sales volumes rose.
The state-run firm had clocked a profit of Rs 1,679 crore a year earlier, NMDC Chairman C S Verma said here.
The company board, however, recommended a 300% interim dividend.
"Despite higher volume, our sales and net profit were lower compared to the same quarter last year. The reason is the subdued price of iron ore, as a result of which average sales realisation was down by 15% in Q2," Verma said.
Turnover fell 5% to Rs 2,480 crore during the quarter from Rs 2,612 crore a year ago.
NMDC had raised the price of both lumps and fines of iron ore in the current month by Rs 100 per tonne for the first time in the past one year.
Verma said he hoped iron ore prices would remain stable for the remainder of the current financial year and that increased sales on the back of better demand from steelmakers would improve the company's profitability.
During the July-September quarter, NMDC produced 5.94 million tonnes (MT) of iron ore while the volume of sales was 6.5 MT, which is 11% higher than the corresponding quarter last fiscal.
The company has set a sales target of about 30 MT of iron ore in the current fiscal. Sales in the first half were 13.76 MT.
Verma said with steel demand in the country expected to grow by 6% in the current fiscal, there would be a spurt in demand for iron ore. NMDC commands about 19% of the country's iron ore market.
