Calcutta, Nov. 8: Coal India has reported a 28.17 per cent dip in net profit for the second quarter ended September at Rs 2,192 crore because of higher expenses.
The net profit stood at Rs 3,052 crore in the same period a year ago.
While net sales rose marginally by 1.67 per cent to Rs 15,678 crore, a 7.87 per cent increase in expenses at Rs 14,144.73 crore pulled down the bottomline.
"The turnover of the second quarter is in line with what we had expected as this period of the year remains a bit dull and offtake remains slow. But a jump in expenses, including power and diesel costs, and employee expenses, affected profit," N. Kumar, director (technical) of Coal India, told The Telegraph.
Contractual expenses jumped 16.8 per cent during the quarter to Rs 1,626.44 crore, while employee benefit expenses rose 4.48 per cent to Rs 7,287 crore.
However, e-auction numbers remained firm despite concerns over declining volumes.
"The total e-auction volume in six months was 27.4 million tonnes, around the same level as last year," Kumar said.
The realisation was lower because of softer international prices.
The Centre has directed Coal India to lower the sale of coal through e-auction so that the miner is able to offer more to power plants through the fuel supply agreements.
Compared with 58 million tonnes sold through e-auctions in 2013-14, the miner has agreed to offer 35 million tonnes in the current fiscal, which is around 7 per cent of the total projected production for the current year.
"We are yet to see the impact of the government directive to lower sales through e-auctions as the supply contracts were already in place before the decision was taken. However, in the third quarter this year, we will see if there is any impact," he said.
Focus on output
Coal India will focus on improving its production to boost the topline despite rising expenses.
"We have seen a 5 per cent jump in production this quarter compared with last year. We are hopeful that production will increase in the third quarter. The coal offtake is also expected to rise in the coming quarters," he said.
Coal India's total production in the quarter ended September 2014 was 102.42 million tonnes compared with 97.60 million tonnes a year ago.
The offtake during the quarter was 110.49 million tonnes against 109.12 million tonnes in the same period a year ago.
Coal India has failed to meet its production targets, except in October, as slow approvals, lack of transport infrastructure and difficulties in land purchases delayed the opening of new mines. The miner has set a target of 507 million tonnes for 2014-15.
No comments:
Post a Comment