31-01-2025
Lloyds Metals & Energy Ltd (BOM:512455) Q3 2024 Earnings Call Highlights: Record Production ...
Revenue Growth: 11% year-on-year increase for nine months FY '25.
EBITDA Growth: 31% year-on-year increase for nine months FY '25.
Iron Ore Realizations: Improved by 8% year-on-year in Q3 FY '25 to INR 5,894 per ton; 10% year-on-year increase for nine months FY '25 to INR 5,718 per ton.
Iron Ore EBITDA: 21% year-on-year increase in Q3 FY '25 to INR 2,021; 21% year-on-year increase for nine months FY '25 to INR 1,860.
DRI Production: 78,000 tons in Q3 FY '25; 239,000 tons for nine months FY '25.
CapEx: INR 2,700 crores spent in nine months FY '25; total of INR 4,400 crores planned.
Warning! GuruFocus has detected 2 Warning Sign with BOM:512455.
Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Lloyds Metals & Energy Ltd (BOM:512455) recorded its highest ever production during the nine-month period, operating at optimum capacity utilization.
The company achieved a 31% year-on-year growth in EBITDA, driven by strong performance in the iron ore and sponge iron segments.
The iron ore segment saw improved realizations per ton, with an 8% year-on-year increase in Q3 FY '25.
Ongoing projects, including the DRI and pellet plant, are nearing completion and are expected to be commissioned by the end of the current quarter or early next quarter.
The company has implemented cost-efficiency measures, ensuring sustainable profits and maintaining competitiveness in the market.
Market conditions for sponge iron remain volatile, impacting profitability despite operational efficiencies.
Power segment volumes remained flat year-on-year, with muted power prices affecting EBITDA.
The company faces potential delays in receiving environmental clearance (EC), which could impact expansion timelines.
There is uncertainty regarding the timeline for the full ramp-up to desired production levels once EC is received.
The company is exposed to market fluctuations and pricing volatility, particularly in the DRI and power segments.
Q: What is the status of the mine's environmental clearance (EC) and when can it be expected? A: The public hearing was held successfully, and the process is now with the district administration. We expect the EC to be finalized within 60 to 70 days. Once received, the expansion can commence shortly thereafter. - Rajesh Gupta, Non-Executive Director
Q: Can you provide guidance on iron ore production for the remainder of the fiscal year? A: We have dispatched 7.87 million tons in the first nine months and expect to reach 10 million tons by the end of the fiscal year, implying approximately 2.2 million tons in the fourth quarter. - Rajesh Gupta, Non-Executive Director
Q: When will the cost savings from the new business structure be realized? A: The benefits will begin from April 1, 2025, following the NCLT order. The savings will be immediate as the business will operate under a consolidated structure. - Riyaz Shaikh, Chief Financial Officer
Q: How long will it take to ramp up production to the desired levels once the EC is in place? A: We are prepared to start mining immediately after EC approval, with machinery in place to achieve 2.2 million tons per month. The pipeline will support evacuation, and we aim to be fully operational within 30 days post-EC. - Rajesh Gupta, Non-Executive Director
Q: What is the timeline for the beneficiation plant and its phases? A: The first phase of the beneficiation plant is expected to be operational by 2027, with subsequent phases following annually. Each phase will add 15 million tons of capacity. - Rajesh Gupta, Non-Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
