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Coal India profit slips 11%

S. Narsing Rao in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury

Calcutta, Feb. 12: Coal India Ltd has reported an 11.4 per cent drop in net profit for the third quarter ended December at Rs 3,894.09 crore on account of a lower offtake and poor sales realisation through e-auction.

Net profit stood at Rs 4,395.11 crore during the same period a year ago.

Net sales of the PSU miner fell 3 per cent to Rs 16,928.13 crore from Rs 17,325.04 crore in the same quarter a year ago even as employee expenses jumped 5 per cent to Rs 6,979.91 crore and wages for contractual staff rose 21 per cent to Rs 1,801.59 crore.

Chairman S. Narsing Rao attributed the decline in net sales to the lower realisation. “We have more coal in the FSA (fuel supply agreement) category where there is lower realisation. Further, the average realisation from the sale of coal through the e-auction route during the quarter was Rs 2,232 per tonne against Rs 2,941 per tonne a year ago,” he said.

Coal India sells about 10 per cent of its output through e-auction at market-determined rates, which have softened in the past few months in line with international prices. However, a higher volume of coal sold through e-auction prevented a further drag on profits.

The rest of the coal is sold to domestic customers — mostly power producers at contracted rates that are at a discount to the global prices.

The company’s production marginally increased to 118.71 million tonnes during the quarter from 117.37 million tonnes in the corresponding year-ago period. However, sales volume (offtake) fell to 117.16 million tonnes from 120.45 million tonnes a year ago.

Rao said the offtake was low particularly from states such as Gujarat and Haryana.

He, however, expressed confidence that the Rs 18,000-crore dividend paid to the Centre would not have any impact on its long-term capital expenditure plan. “No, there will be no problem for the next 10 years. Currently, our average capex plan is Rs 5,000 crore a year for the rest of the 12th plan period (2012-17).”

 
 
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