Dragged down by higher expenses on the back of wage hikes, Coal India Ltd (CIL) registered a nearly 18 per cent drop in consolidated net profit at ₹5,528 crore for the quarter ended March 31, 2023, as compared with ₹6,715 crore same period last year.

The decline in net profit was despite a nearly 17 per cent rise in revenue from operations at ₹38,152 crore during the quarter under review as against ₹32,709 crore same period last year.

The company’s board that met on Sunday recommended the payment of a final dividend of ₹4 per share. Earlier in two tranches a total dividend of ₹20.25 per share was already paid out.  

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Increase in expenses weighs on profitability

Total expenses went up by nearly 30 per cent at ₹32,792 crore during the quarter under review as against ₹25,140 crore same period last year. Of this, the employee benefit expenses increased by nearly 60 per cent at ₹16,983 crore as against ₹10,595 crore last year.

PAT would have been the highest ever profit in any quarter had the provision not been made, the company said in a press statement. 

Sequentially, net profit dropped by 28 per cent as compared to ₹7,719 crore during the third quarter ended December 31, 2022. CIL’s net profit had increased by 69 per cent in Q3 FY23 to ₹7,719 crore (₹4,557 crore) on the back of a higher add-on over the notified price in e-auction sale of 14.65 million tonnes (mt) coal.

The company registered a 62 per cent rise in net profit at ₹28,125 crore for the year ended March 31, 2023, as compared with ₹17,378 crore in FY22 on the back of higher volume sales and increased premiums in e-auction. This rise in net profit was despite provisioning ₹8,153 crore in the accounts in 2022-23 towards wage revision of CIL’s non-executive manpower.

The company managed to lift its profit into higher orbit despite the company capping its coal prices for over past five years amidst rising input costs, especially diesel and explosives and increased wage cost due to provisioning in the accounts, the press release said.

Production and realisation

Coal India registered a nearly 13 per cent rise in production at around 703.2 mt during FY23, as compared with 622.6 mt in FY22. Offtake was up by nearly five per cent at 694.6 mt (661.8 mt) in 2022-23.

The State-owned miner sold close to 167.45 mt of coal through the FSA (fuel supply agreement) route clocking net sales of ₹25,950 crore. The average realisation per tonne was around ₹1,550 a tonne.

It sold 16.4 mt of coal through the e-auction route clocking net sales of ₹7,421 crore. Though e-auction sales at 16.4 mt were lower by 41 per cent in volume terms in Q4 compared to 27.65 mt of similar quarter FY22, higher premiums under the e-window helped CIL in cranking up e-auction sales by ₹690 crore.

The realisation per tonne of coal was higher by around 86 per cent at ₹4,526 under auction segment in Q4 against ₹2,434 in same quarter of FY22. It also sold close to 0.02 mt of imported coal at ₹24.82 crore at an average realisation of ₹10,341 a tonne.

Higher volume sale by 17.34 mt and better average realisation under FSA resulted in a net impact of around ₹3,879 crore in the fourth quarter of last fiscal.

FSA sale increased to 167.45 mt in Q4 FY23 compared to 150.11 mt last year while realisation per tonne was up by around five per cent at ₹1,550 a tonne compared to ₹1,470 per tonne of Q4 FY22, the release said.

For entire year 2022-23, realisation per tonne of coal under e-auction was ₹4,841 against ₹1,879 per tonne in FY22, up by 158 per cent. The same in case of FSA sales was ₹1,475 compared to ₹1,406 of FY22.

Earnings before interest, tax, depreciation, amortisation, impairment (EBITDA) rose by 49 per cent during FY23 to ₹40,291 crore from ₹26,974 crore in FY22.

On Friday, the company’s stock closed at ₹237.35, down by 0.06 per cent on the BSE.

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