Coal India net takes a hit

Calcutta, Dec. 13: Public sector miner Coal India's September-quarter consolidated net profit took a hit as it made a Rs 710.64-crore provision to cover for the salaries and wages of its employees.

Net profit during the quarter stood at Rs 600.17 crore compared with Rs 2,654.34 crore a year ago.

The provision, recorded as part of employee benefit expenses, comes at a time of discussions relating to the wage revision of employees.

Coal India sources said an initial discussion on wages had taken place and more discussions were expected in the subsequent quarters before the final revision.

Consolidated gross sales during the quarter stood at Rs 25,759.39 crore, a growth of 8.13 per cent over the year-ago period. Gross sales in the first six months of the fiscal were Rs 54,276.27 crore against Rs 50,250.58 crore a year ago.

Both production and offtake at 104.37 million tonnes and 115.87 million tonnes, respectively, were lower than the year-ago period.

Average realisation of coal in the first six months from fuel supply agreements stood at Rs 1,264 per tonne. Realisation for coal from e-auctions during the April-September period was Rs 1,463 per tonne, lower than the average e-auction realisation in the first quarter at Rs 1,570 per tonne.

Coal India sold 6.81 million tonnes of washed coal in the first six months at an average realisation of Rs 2,658 per tonne.

The shares of Coal India were marginally up 0.08 per cent to Rs 305.75 on the Bombay Stock Exchange.

The miner informed the shareholders that it expects 400 million tonnes of coal from 121 major ongoing projects in 2016-17, which is expected to increase to 561 million tonnes by 2019-20.

Taking into consideration the completed, ongoing and future projects of Coal India, its total production is projected to grow to 908.09 million tonnes by 2019-20.

Industry observers, however, said that unless the demand for coal improved, especially from the power sector, actual production could deviate from the projected path set by the miner.

Coal India Ltd