Coal India Profit Surges - Rajib Maitra
Kolkata, 13 November: Coal India yesterday reported a 67.57 per cent growth in profit after tax (PAT) at Rs 6,737.03 crore for the half year ended September although it reported a 4.87 per cent lower production of coal over the same period last year.
World’s single largest coal producer Coal India Ltd (CIL) produced 176.62 million tons of coal in the first six months compared with 185.65mt in the previous corresponding period posting a 20 million tones short fall against the AAP (annual action plan) target. During this period (H-1 of current fiscal) coal off take grew from 199.94 mt (April-September, 2010) to 199.98mt, a marginal growth of 0.02%. Subsequently, Gross sales jumped up to 29.59%, from 26,886 Cr to 34,815 crore, and despite the negative production, net sales jumped from 22,537.94 cr to 27,647.16 crore – a growth of 22.67%.
As a matter of fact, an increase in coal prices from 28th February this year and higher interest income on Rs 45,000-crore bank fixed deposits helped the company report a steep surge in net profits.
During this half year companies Net worth stood Rs. 39,909 crore.
For the quarter ended September, the company’s net profit grew 74 per cent to Rs 2,593 crore.
CIL steeply increased its coal prices for certain grades as well as the prices of other grades of coal for certain categories of customers. “Now, 25 per cent of our total coal sales are determined by market-linked prices,” said Ashok Kumar Sinha, director (finance), Coal India.
The coal sold through the e-auction route fetched the company additional revenues worth Rs 5,776 crore for the first six months of the current financial year, while additional revenue from washed coal stood at Rs 1,614 crore.
“We are a very cash rich company and have Rs 45,000 crore in bank fixed deposits. Given the higher interest rate, it has increased our other income,” said Nirmal Chandra. Jha, acting Chairman of Coal India.
He added that in October, 2011, the 4mt coal set aside from e-auction for power producers didn’t find many takers because of logistical bottlenecks . “ Out of 40 lakhs only 4 lakh tons were lifted by power producers. The remaining stock is still lying with us,” Mr. Jha said.
Regarding rake availability CIL chief said that in the month of April this year Railways provided them 183 rakes per day. But after that during rainy season rake availability was badly hit. Currently CIL is getting about 180 rakes per day from railway per month. CIL is also holding talks with the railways to increase this to about 200 rakes per day.
Jha, however, exuded confidence that the company will be able to ramp up its coal production in the coming months and make up for the production losses by the year-end. CIL aims to produce 452mt in 2011-12.
The CIL management is also hopeful that it will surpass the Net profit target of current fiscal of Rs. 12,000 crore. Mr. Jha opined, “ in first half year we have crossed 6,000 crore, so it is not any difficulty to get another 6,000 crore during second half.” The company’s earning per share stood at Rs. 10.66 (Rs. 10 per share)
3 comments:
short on all targets, unable to meet the nation's growing hunger for energy, struggling to gt the environment act in place ... coal india is indeed a scrip to watch. by dipping into its interest earning to post profits , is it tottering towards the brink?
Coal India bashing has been a favourite past time & a convenient tool for many to swing public opinion away from the root of the main problems in energy sector. People forget to note the damage caused by the two fatal tools 'No Go & Go' as well as CEPI that has retarded implementation of coal projects by at least three years. Coal India is branded inefficient, conveniently ignoring the fact that the company singularly meets 40% of energy needs of the country and even after selling coal at 50% of world prices it makes huge profits, pays huge amounts towards taxes & dividends and still continues to have huge cash deposits. This company has turned coal - the mainstay in energy scenario - an intrinsically viable industry w/o any direct or indirect subsidy. In recent years, it is one of the few companies to have made India proud by bringing a stellar IPO that attracted 54 Billion US$, highest by any company in the WORLD in 2010. The only problem to which it could not find a solution is the black colour of the commodity it produces, which on being touched
renders the hands black. One needs to tide over this perception to realise the inherent strength of the company. Notwithstanding the wishes of the dooms day prophets, this company is destined to scale Mt everest in the time to come. Partha S Bhattacharrya, former Chairman, Coal India Ltd.
Mr. Bhattacharya's comments are understandable. His need to comment arises from fact that it was during his time that this industry which was limping on lies and deceit about its actual production and quality of such production, was showcased, that too quite competently by him, as the golden goose amongst the industries. With the lure of large earnings out of the disinvestment looking bright, Bhattacharya had the Finance Minister eating out of his hand, which gave him the political strength he required for his not too legal activities. Coal companies were manned by his personal stooges, who helped him show case the industry which was seeped in mire. Profits rose steeply with steep price rises, not due to increased productivity. Today coal price in open market in eastern part of India has touched Rs. 10,000/- per ton. Poor management, even poorer decision making by Bhattacharya's stooges who appear lost without their foster father has shaken the fundamentals of this coal monolith. For the sake of the hapless employees let us hope the company can pay salary and wages,PRP and bonus for another five years. Let Mr. Bhattacharya cool himself on the Mt Everast till then.
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