* Q3 profit 38.94 bln rupees vs 43.95 bln year ago
* Profit decline on account of lower prices at coal auctions
* Q3 sales volumes down 3 pct to 117.2 mln tonnes
By Prashant Mehra
MUMBAI, Feb 12 Coal India Ltd, the
world's largest coal miner by output, posted its third straight
decline in quarterly profit, on the back of softer prices at
coal auctions and lower sales volumes during the period.
The state-run company said net profit for its fiscal third
quarter ended December fell 11.4 percent on the year to 38.94
billion rupees ($625 million). Net sales fell 2 percent to a
lower-than-expected 169.28 billion rupees.
Analysts, on average, had forecast profit of 38.94 billion
rupees, on net sales of 170.8 billion, according to Thomson
Reuters Starmine data.
Profit was lower because of the fall in price realisations
from e-auctions, Coal India Chairman S Narsing Rao told
reporters at its headquarters in Kolkata. E-auction prices
averaged 2,332 rupees a tonne during the quarter, down more than
a fifth from 2,941 rupees a tonne a year earlier.
The company sells about 10 percent of its volume through
e-auctions at near-spot rates, which have stayed soft in the
past few months, in line with international prices.
Coal India sells the rest of its output to domestic
customers through long-term contracts, with prices at discounts
of between 45 and 70 percent to international prices. It last
raised these prices marginally for some categories in December.
The miner, which accounts for 80 percent of India's coal
output, has missed production targets so far this year,
resulting in costly imports. It produced a lower-than-targeted
452 million tonnes of coal in 2012/13.
Its growth has also been hobbled by a lack of modernisation
and delayed approvals of its mining projects.
In the quarter ending Dec. 31, Coal India said it produced
118.7 million tonnes of coal, compared with 117.4 million tonnes
a year ago. However, shipments fell 3 percent to 117.2 million
Employee expenses rose 5 percent to 69.8 billion rupees for
the quarter, and wages for contractual staff jumped 21 percent
to 18.02 billion rupees.
Shares in the company, worth more than $27 billion, have
lost about 7 percent of their value so far in 2014, compared to
a 3 percent fall in the main stock index. Ahead of the
results, the stock closed nearly flat at 269.90 rupees on
Wednesday, in a strong Mumbai market.
($1 = 62.27 rupees)
(Editing by David Evans)