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[NEW DELHI] Coal India Ltd, the world's biggest miner of the commodity, reported a 23.3 per cent decline in first-quarter profit as higher salaries eliminated gains from an increase in shipments.
Net income for the three months ended June 30 dropped from a year ago to 23.51 billion rupees (S$497.65 million), according to a stock exchange filing Monday. That makes it the fifth consecutive year-on-year decline in quarterly profit. It missed the average 26.5 billion rupee profit estimate compiled by Bloomberg. Sales rose 4.1 per cent boosted by higher shipments while employee costs jumped 6 per cent to 80.72 billion rupees.
Coal India is struggling with subdued demand from its biggest customers, power stations, forcing it to curtail its production and shipment targets for the year. The company's output has dropped for four straight months as it focuses on reducing its inventory.
Salaries of non-executive staff, who comprise 94 per cent of Coal India's about 308,000 employees, were due for revision from July 2016, while salaries of executive employees were to be revised from the start of the current calendar year.
The company said employee costs during the quarter included an ad hoc provision of 7.78 billion rupees for an increase in executive and non-executive salaries.
The Kolkata-based company, which produces more than 80 per cent of India's coal, sold 137.4 million tons during the quarter, 3.4 per cent more than it did a year ago. Output declined 5.2 per cent over the year to 118.8 million tons.
The company earned an average price of 1,337 rupees on every ton sold, little changed from a year ago. It raised prices of lower-grade thermal coal in May 2016 and of coking coal in January.
Shares closed 1 per cent higher at 238.15 rupees in Mumbai, while the benchmark S&P BSE Sensex rose 0.8 per cent.