Coal India, in its fourth quarter reported 18 percent year on year decline in net profit to Rs 5,528 crore. Though the revenues were higher by 17 percent, operating margins plunged 907 bps to 18.1 percent. Earnings before interest, tax, depreciation and ammortisation declined 24 percent to Rs 6,898 crore versus Rs 9,078 crore in same quarter of last year.

Share Market Live

NSE

The company's performance is much below street expectations. Earnings before interest, tax, depreciation and ammortisation reported at Rs 6,898 crore is nearly half of CNBC-TV18 poll at Rs 12,550 crore. Similarly margins expectations was 34.8 percent. Net profit expectations were at Rs 9,210 crore, while the reported is Rs 5,528 crore.

The state run coal mining company's profitability was affected by increased provisions of Rs 337 crore. Also, employee benefit expenses jumped 60 percent year on year and 47 percent quarter on quarter to Rs 16,982 crore in the fourth quarter. The National Coal Wage Agreement - XI (NCWA-XI) dealing with the salary of non-executives is due for revision from July 1st, 2021. Pending finalisation of the agreement, Rs 5,870 crore for fourth quarter and Rs 8,152 crore for full year 2022-23 have been provided for and included under employee benefits expense. This is much higher than Rs 475 crore in corresponding quarter last year and Rs 1,080 crore for full year 2021-22. "Profitability would have been the highest ever in any quarter had the provision not been made" the company said in its press release.

The company produced raw coal of 224 million tons in fourth quarter, 7 percent higher year on year and 24 percent higher quarter of quarter. The offtake of raw coal in same quarter at 187 million tons was also higher by 3 percent year on year and 6 percent quarter on quarter. For full financial year 2022-23, production grew 13 percent, while offtake grew 5 percent. "Higher volume sales and increased premiums in e-auction bolstered the company’s

profitability" Coal India said in its press release.

"Though e-auction sales at 16.40 MTs were lower by 41 percent in volume terms in Q4 compared to 27.65 MTs of similar quarter FY22, higher premiums under the e-window, helped CIL in cranking up e-auction sales by Rs 690 Crores. The realization per tonne of coal of was Rs 4,526 under auction segment in Q4 against Rs 2,434 in same quarter of FY22. The jump was Rs. 2,092 per tonne or 86 percent."

For the full year 2022-23, revenues were higher by 26 percent to Rs 1.38 lakh crore, while net profit jumped 62 percent. This is an all-time high annual profit after tax. Company says 'CIL lifted 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 Board has recommended a final dividend of Rs 4. The second interim dividend of Rs 5.25 and first interim dividend of Rs 15 were declared for the financial year 2022-23 on 31st January 2023 and 7th November 2022 respectively.