* Lower prices, higher wages and fuel costs weigh
* Sponge iron, cement demand subdued, company says
* Coal India expects to gain through May price hike
MUMBAI/NEW DELHI, Nov 13 Coal India,
the world's largest coal miner by output, posted its second
straight decline in quarterly profit, hurt by lower selling
prices and higher wage and diesel costs.
The Kolkata-based company said net profit for its fiscal
second quarter fell marginally to 30.5 billion rupees ($479
million) from 30.8 billion rupees a year earlier. Net sales rose
5.8 percent to a lower-than-expected 154.1 billion rupees.
Analysts, on average, had forecast profit of 35.2 billion
rupees, according to Thomson Reuters Starmine data.
"The sponge iron industry is in the doldrums, construction
industry and thus cement makers have been hit. This led to lower
price realisation in e-auctions," Finance Director A. Chatterjee
Sponge iron producers and cement companies form the bulk of
buyers at e-auctions, Chatterjee said. E-auction prices averaged
2,220 rupees a tonne during the quarter, down from 2,460 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
last few months in line with international prices.
Coal India, which accounts for 80 percent of India's coal
output, has missed production targets so far this year,
resulting in costly imports. The miner 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.
For the quarter ending Sept. 30, the miner said it produced
97.6 million tonnes of coal, compared with 89.1 million tonnes a
year ago. Shipments rose 7 percent to 109.1 million tonnes.
Employee expenses rose 3 percent to 69.7 billion rupees for
the quarter, and wages for contractual staff jumped 28 percent
to 13.9 billion rupees.
Coal India, which prices domestic coal at discounts of
between 45 and 70 percent to international prices, raised prices
for some categories in May, a move which it says will yield
additional revenue of 25 billion rupees annually.
Shares in the company, worth more than $29 billion, have
lost nearly a fifth of their value so far in 2013,
underperforming a near 4 percent rise in the main stock index
. The stock closed 0.1 percent higher on Wednesday,
ahead of the results announcement.
($1 = 63.64 rupees)
(Reporting by Prashant Mehra and Krishna Das; editing by David