Coal India posts Q1 profit fall on higher wage provisions

BENGALURU (Reuters) – Coal India reported a fall in quarterly profit for a second straight quarter on Tuesday, as the world’s largest coal miner made higher provisions for wage hikes.

Consolidated net profit fell nearly 10% to 79.71 billion rupees ($962.4 million) for the first quarter ended June 30, the state-run company said in an exchange filing.

It had posted a 17.3% fall in profit in the January-March quarter, halting a profit climb of more than 45% in every quarter since the three months ended December 2021.

Coal India said its provisions for wage hikes rose to 8 billion rupees from 3.24 billion rupees a year ago, cutting into its profit margin.

Adding to fuel the fire was the slowing revenue growth, which grew by a bare 2.5% to 359.83 billion rupees, as coal prices normalised during the quarter.

The Kolkata-based company said it saw lower realisation per tonne of coal at 3,740.84 rupees in the auction segment in the first quarter, down 13.8% from a year ago.

This came even as India, the world’s second-largest coal consumer and importer, saw higher demand for coal, as power plants stocked up for the surge in summer electricity consumption.

Coal India breached its annual production target of 700 million tonnes in fiscal 2023, the first time it had surpassed its goal since fiscal 2006.

Shares of the company were down 1.2% on Tuesday ahead of the results. The stock rose about 8% in the April-June quarter when compared with the 8.2% rise in the Nifty energy index in the same period.

($1 = 82.8250 Indian rupees)

(Reporting by Biplob Kumar Das in Bengaluru; Editing by Janane Venkatraman)