Coal India Q4 net down by 4% at Rs 4,238 cr

Hit by an increase in employee cost and contractual expenses, state-owned Coal India Ltd (CIL), today reported a 4.41 per cent drop in consolidated net profit at Rs 4238.55 crore for the quarter ended March 31, 2015, compared with Rs 4,434.19 crore a year ago.

Net sales for the period, however, rose 3.88 per cent to Rs 20774.22 crore over Rs 19,997.98 crore reported in the year-ago period, on the back of a higher output and offtake during the period.

The employee benefits expenses has gone up by 13.39 per cent to 8034.12 per cent. Thwe contarctual expenses , on the other hand was at Rs 2804.79 crore dyring the quarter, up 30.56 per cent from the corresponding period of the previous fiscal.

The world's largest coal producer's consolidated net profit for 2014-15 rose to Rs 13,726.62 crore from Rs 15,111.64 crore in the previous financial year. The company has registered a decrease of 9.17 per cent in net profit in the year. Net sales during the fiscal rose 4.66 per cent to Rs 72,014.52 crore against Rs 68,810.02 crore in the previous financial year.

Coal India missed the production target for the financial year 2014-15 by 3 per cent recording an output of 494.23 million tonnes. The company's output target was 507 million tonnes for the fiscal. The off-take or actual lifting of coal by consumers for 2014-15 stood at 489.34 million tonnes, short by six per cent of the set target.

CIL's production target for 2015-16 year is 550 MT, which translates into an 11 per cent annual growth. CIL, however, started the fiscal with a production spurt. Coal India has begun 2015-16 on a strong note registering a production growth of 10.7 percent at 41.52 million tonnes in April, over the corresponding month of 2014.Coal offtake was at 43.52 million tonnes during April.

"We have started the quarter on a good note. Also we expect e-auction volume to go up in accordance with a higher offtake. This should have a postive impact on the bottomline in the current fiscal," said an official.

It should be noted that the government has allowed CIL to revert to the old system, removing the cap on e-auction volumes with effect from April 2015. This might boost the miner's bottom line in the coming days. This means e-auction sales will account for about 10 per cent of its sales volume, which was the standard practice before the coal ministry put a seven per cent cap in September 2014.

While a small part of overall volumes, e-action sales contribute 35-40 per cent of total Ebitda (earnings before interest, taxes, depreciation and amortisation). Hence, higher e-auction volumes would mean higher profitability in the coming quarters.

The shares of Coal India today closed at Rs 383.10 on Bombay Stock Exchange(BSE), up 0.7 per cent from previous close.