Singareni Collieries profit dips on wage bill

Rise in production cost, driven mainly by wage revision, substantially impacted the profits of the state-owned Singareni Collieries Company Limited (SCCL) during the year 2005-06 in spite of the company achieving higher targets in terms of output and gross turnover during the same period.

Production cost was up by around Rs 60 per tonne to Rs 946.65 per tonne as compared to Rs 886.42 per tonne in the previous year.

According to provisional figures furnished by the company, SCCL's gross profit was down to Rs 487.82 crore during the year as compared to Rs 576 crore in 2004-05.

Coal production in the Singareni coalfields touched 36.13 million tonnes during the just concluded financial year, posting a 2.35 per cent increase over previous year's production of 35.30 tonnes. Gross turnover witnessed a 6.07 per cent increase at Rs 4,209 crore during 2005-06 as compared to Rs 3,968 crore in the previous year. The company also achieved a relatively higher sales realisation of Rs 3,680 crore during the year as compared to Rs 3,461 crore in the previous year.

Citing the reasons for the dip in profits, T R K Rao, executive director of SCCL, said the company had to incur a higher salary bill due to the implementation of new wages resulting in an additional expenditure of around Rs 800 crore. Additional financial burden of about Rs 200 crore was incurred on account of increase in fuel costs among other things, he said.

According to Rao, this is the fourth consecutive year for SCCL to achieve production targets since the company had achieved a turnaround in the year 2002-03. Nevertheless, the company has downsized its workforce reducing the total strength to 86,196 employees during the year from 91,970 workforce existed as on March 2005.

Production from open cast operations registered an increase of one million tonnes during the year which rose to 23.40 million tonnes from 22.32 million tonnes in 2004-05. The average output per manshift in coal mines rose to 2.16 tonnes during the year from 1.99 tonnes in the previous year.

Among the new initiatives taken up during the year, SCCL has formulated nine feasibility reports including two major projects costing Rs 892 crore besides switching over to e-procurement system for all its procurement requirements from 2005-06 onwards, according to a press release.