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Hit by higher fuel cost, rise in the wage bill and lower realisation from e-auctions, Coal India Ltd (CIL) failed to meet the Street’s expectation of a flat profit. The state-run miner on Saturday reported a 16.5 per cent drop in consolidated net profit at Rs 3,731 crore for the quarter ended June 30.
The company had posted a consolidated net profit of Rs 4,469.3 crore in the April-June period of the previous financial year.
Net sales in the first quarter decreased 0.17 per cent to Rs 16,472.4 crore from Rs 16,500.6 crore in the year-ago period.
During the quarter, the company reported a near-flat production growth at 102.89 million tonnes (mt) against 102.4 mt for the year-earlier period. Its offtake for the quarter was 115.36 mt, up 2.1 per cent from the year-ago period.
“There has been a Rs 758-crore increase in cost of production against the corresponding period of previous financial year on account of diesel price increase, salary increase and contractual expenses,” Chairman and Managing Director S Narsing Rao said. Of the Rs 758 crore, the wage bill alone accounted for a Rs 425-crore increase in cost of production. Diesel price rise and increase in contractual expenses accounted for Rs 130 crore and Rs 203 crore, respectively.
“There was a total of Rs 15 increase in diesel price in the quarter and wage bill, too, went up expectedly. There was a coal price increase to offset this higher production cost but that was realised only in the last month of the quarter,” Rao added.
Realisation from e-auctions also took a hit. “E-auction volume was almost same in the quarter, with only a 0.24 per cent reduction. But we took a hit of Rs 421 a tonne so far average sales realisation from e-auctions is concerned,” he said.
Realisation from e-auctions during the quarter was Rs 2,140 a tonne against an average Rs 2,561 a tonne a year ago.
Rao said, “We are trying to meet a 5.8 per cent volume-growth target. There will be some pressure as we have to meet the FSA (fuel supply agreement) obligation. Still, numbers will improve when we meet the output target.”
However, Coal India is still not considering importing coal. “Procedural preparation for import of coal has been taken. Still, at this point of time I do not think we will have to resort to import. Perhaps, by the end of second quarter we will be in a position to take a final call on the import issue,” Rao said.
On an another round of price increases in the current financial year, he said, “We can neither confirm nor rule out the possibility of price hike at this point of time.”
The company had posted a consolidated net profit of Rs 4,469.3 crore in the April-June period of the previous financial year.
Net sales in the first quarter decreased 0.17 per cent to Rs 16,472.4 crore from Rs 16,500.6 crore in the year-ago period.
During the quarter, the company reported a near-flat production growth at 102.89 million tonnes (mt) against 102.4 mt for the year-earlier period. Its offtake for the quarter was 115.36 mt, up 2.1 per cent from the year-ago period.
“There has been a Rs 758-crore increase in cost of production against the corresponding period of previous financial year on account of diesel price increase, salary increase and contractual expenses,” Chairman and Managing Director S Narsing Rao said. Of the Rs 758 crore, the wage bill alone accounted for a Rs 425-crore increase in cost of production. Diesel price rise and increase in contractual expenses accounted for Rs 130 crore and Rs 203 crore, respectively.
“There was a total of Rs 15 increase in diesel price in the quarter and wage bill, too, went up expectedly. There was a coal price increase to offset this higher production cost but that was realised only in the last month of the quarter,” Rao added.
Realisation from e-auctions also took a hit. “E-auction volume was almost same in the quarter, with only a 0.24 per cent reduction. But we took a hit of Rs 421 a tonne so far average sales realisation from e-auctions is concerned,” he said.
Realisation from e-auctions during the quarter was Rs 2,140 a tonne against an average Rs 2,561 a tonne a year ago.
Rao said, “We are trying to meet a 5.8 per cent volume-growth target. There will be some pressure as we have to meet the FSA (fuel supply agreement) obligation. Still, numbers will improve when we meet the output target.”
However, Coal India is still not considering importing coal. “Procedural preparation for import of coal has been taken. Still, at this point of time I do not think we will have to resort to import. Perhaps, by the end of second quarter we will be in a position to take a final call on the import issue,” Rao said.
On an another round of price increases in the current financial year, he said, “We can neither confirm nor rule out the possibility of price hike at this point of time.”
