Corporate
CIL Q3 profit falls 14% on 8% drop in sales on year was up 30 percent on quarter although the volumes remained soft. “We note that FSA ASP is strong in Q4 and it more than offsets the weakness in e-auction prices,” Emkay Research said in a note. Realisation from auction sales dropped 8 percent to `2,623/ton while volumes declined 33 percent to 9.84 million tons. “FSA realisations remain strong with 5.7 percent y-o-y growth, while e-auction realisations fell only 7.9 percent on year against 12 percent drop in international coal prices. This may be due to cushioning from non-power linkage auction sales, which are at a 15-20 percent premium to FSA prices and de-linked from international coal trends,” JM Financial said in a research report. EBITDA
Coal Insights Bureau
C
oal India's consolidated net profit has dropped 14.1 percent during the October-December quarter to `3923.87 crore due to poor offtake which has fallen 7.8 percent in net sales to `21566.41 crore on year-on-year basis. Realisations
Average realisation from FSA sales were higher by 6 percent on year at `1,411 per ton due to higher non-power segment sales and better grade realized even though FSA volumes declined 6 percent to 127.7 million tons. FSA realization was almost flat in quarter while e-auction realization Quarterly figures Particulars FSA
Quantity (mt)
18015.84
1411
2581.05
2623
137.53
20596.89
1498
Washed coking coal
0.29
205.46
7085
Washed thermal coal
2.04
415.96
2039
Total washed coal
2.33
621.42
2667
1.69
348.10
2060
141.55
21566.41
1524
Total Source: Coal India
ASP is stagnant while EBITDA/t is improving
Source: Company, Emkay Research
Employee costs and contractual expense included past arrears of `220 crore and `225 crore respectively, on account of increase in workman’s compensation and arrears of executive pension due from October 2017. Coal India employed 2,85,479 employees at the beginning of FY19. The company produced 147.50 mt of raw coal in quarter against 155.97 mt in the year ago period. Coal India's expenses remained flat at `18,222.05 while financing costs jumped 144 percent to `151.27 crore. Railways lines
♦♦ 15-20 mt addition to CIL production was expected from the Tori-Shivpur line which connects SECL; however, its last mile connectivity is mired in legal issues delaying actual off-take
Average Realisation (` per ton)
9.84
Other by products
Employee costs
E-auction realization started picking up
127.69
E-auction Total raw coal
Net Sales (` in cr)
fell 27 percent on year due to operating de-leverage as employee expenses form 60 percent of overall cash costs and are fixed in nature.
Source: Company, Emkay Research
E-auction premium over FSA rebound in Q3FY20
Source: Company, Emkay Research
Coal Insights, February 2020
35
