Subdued prices of steel-making raw material coupled with lower realisation has dented the the net profit of National Mineral Development Corporation, the state controlled iron ore miner, by 17.51% to R1,572 crore for the April-June quarter. The PSU had reported R1,906 crore net profit in the corresponding quarter of the previous fiscal.
As per the financials reported by the company, NMDC?s profit eroded as it had to make a provision of R66 crore, or 10% of the sales proceeds, for local area development as per Supreme Court directive. This was not the case in the year ago period.
?Our production as well as sales were up during the quarter. But profit-after-tax was down due to lower realisation, compared with the same period last year. We had to take R310-crore hit during the quarter due to lower realisations,? NMDC chairman CS Verma said.
However, the net sales of NMDC for April-June quarter was up marginally by 1.10% to R2,869.10 crore in the quarter vis-a-vis R2,837.90 crore of the Q1FY13. Its total expenditure, at R1,001.79 crore, amounted to 34.92% of its net sales during the quarter due to R255 crore increase in its expenditure on exporting iron ore.