Coal India, the world’s largest coal miner, missed first-quarter profit expectations on Monday, on weaker production volumes and higher costs.
The state-run company, which accounts for roughly three‑quarters of the nation’s coal output, reported a narrow 0.6% rise in its consolidated net profit to 88.52 billion rupees ($923 million), while analysts expected 99.43 billion rupees, as per data compiled by LSEG.
The company’s coal production remained weak during April-May before recovering in June, according to analysts at Elara Capital.
While coal-based power generation in India rose 9% year-on-year in the June quarter, Coal India’s offtake, or sales to customers, only grew 4%, while production dropped by 7%.
Analysts at Systematix expected the company to face continued margin pressure from rising mining costs despite healthy realization.
The firm’s net profit margin dropped to 19% from 27% a year ago.
The company does not disclose its mining costs; however, its total expenses climbed about 12% to 368.16 billion rupees.
Coal India’s average realization from so-called e-auction sales stood at 3,085.44 rupees per ton, higher than the 2,917.22 rupees per ton from a year ago, while overall average price realization of coal supplied during the quarter rose by 68.39 rupees from a year ago.
The company gets 10% of its sales through e-auctions at near-spot rates, and sells the rest of its output to domestic customers through long-term contracts.
($1 = 95.9100 Indian rupees)
(By Anuran Sadhu; Editing by Harikrishnan Nair and Vijay Kishore)
