Coal India profit misses estimates as glut weighs down on prices
MUMBAI: Coal India Ltd., the world's biggest producer of the fuel, missed analysts' estimates for fourthquarter profit as oversupply of the fuel and lower international prices trimmed earnings.
Net income for the three months ended March 31 rose to 42.5 billion rupees ($ 634 million) from 42.4 billion rupees a year earlier, the state- run monopoly said in a stock exchange filing Sunday. The profit lagged a mean estimate of 45.5 billion rupees from 22 analysts compiled by Bloomberg. Coal deliveries during the period rose 7.8 percent to 145.2 million metric tons. A drop in sales per ton to 1,429.5 rupees from 1,542 rupees a year ago ate into the Kolkata- based miner's earnings, offsetting growth in deliveries. A glut caused by the company's record output last year and a decline in global prices also proved a drag on profit. Sales in the three months were flat at 207.6 billion rupees, compared to 207.7 billion rupees in the previous year, the company said.
Power producers, Coal India's biggest customers, are struggling to use all their capacity, as cash- strapped regional power retailers curtail purchases. The miner, which has a target to almost double its annual output to 1 billion tons in four years, is counting on demand from power utilities following government measures to turn around the indebted retailers.
The company produced 165.2 million tons of coal during the quarter, the most ever in a quarter. In April, however, it cut output and deliveries for the first time in 15 months, as inventories piled up. It will increase prices by about 6.29 percent from May 30, the company said in a separate statement.
Coal India's shares rose 0.2 percent to 281.30 rupees on Friday in Mumbai. The stock has declined 15 percent this year, compared with a 2 percent gain in the benchmark S&P BSE Sensex.