CIL beats Street as consolidated net rises 35%

Even as the inter-ministerial group is in favour of reserving a tenth of Coal India shares for employees in its proposed 10% divestment, the CIL management will meet trade unions on May 29 to convince them to go along with the proposal. The All India Coal Workers Federation and three others have threatened to go on an indefinite strike, protesting against the share sale, which could fetch the government R19,000 crore. At R313.50 per share on Monday, CIL?s market capitalisation on Monday was R1.98 lakh crore.

CIL on Monday beat Street expectations with a 35% jump in consolidated net profit to R5,414 crore for the quarter ended March 31.

For FY13, consolidated profits were up 17% to Rs 17,356 crore while total income increased 10% to Rs 77,049 crore and other income rose by Rs 951 crore or 19% to Rs 6,010 crore. CIL has cash reserves of Rs 62,236 crore.

S Narsing Rao, chairman and MD said at a press conference that 2.01% y-o-y growth in average sales realisation aided growth as did more production and off-take. CIL did not revise prices in FY 13.

CIL?s consolidated EBIDTA rose 61.6% to Rs 6,119 crore in Q4FY13 while EBIDTA margins also came in ahead of expectations, surging 1120 basis points to settle at 30.7%. CIL also saw a fall in costs to Rs 14,255 crore from Rs 16,021 crore.

CIL?s cash reserves have touched a whopping 62,236 crore, registering 6.92% y-o-y growth, enabling the company to earn Rs 6,010.11 crore from interest. The company?s interest income grew 9.1% y-o-y Rao said. He said CIL was on track to achieve a 6% y-o-y production growth at 492 mt in FY 14. The company?s supplies to the power sector increased 10.7% y-o-y to 345.53 mt in FY 13 from 312.07 mt in FY12 and this was expected to grow in the current year if rakes were properly available. The coal, major which began FY 13 with a pit head stock of 70.88 mt was able to liquidate 12.97 mt. The ground stock as on April FY 13 stood at 57.91 mt.

During the year, Coal India produced 452.21 mt of coal, up from 435.5 mt in the previous year but lower than the 464 mt it had targetted. Offtake in FY13 stood at 465 mt compared to 433 mt in the previous fiscal. Under pressure to help reduce the coal deficit in the country, CIL has set a target of 482 mt in production in FY14. The average cost of production per tonne however, went up by Rs 25 per tonne to Rs 1,050 per tonne, more than the average price realised in FY 12. However the change in grade mix, which happened due to shift from useful heat value (UHV) based pricing to gross calorific value (GCV) based pricing fetched CIL the additional realisation, without which the company would have suffered.