keywords :
National miner Coal India Ltd (CIL) saw its profit falling by 23.9 per cent in the financial year 2020-21 marred with low demand from both power and metal sector due to Covid pandemic. The company’s net profit stood at Rs 12,720 crore in FY21, down from Rs 16,700 crore a year before.
This is a steep fall for the CIL as it battles falling coal demand. During 2016-17, its profit fell by 30 per cent and recovered in 2018-19 with a more than 100 per cent jump. However, both profit and income levels of FY20 are close to 2017 levels.
The company’s income fell by 8.5 per cent during the last fiscal. During 2020-21, the total income was Rs 93,818 crore. Its revenue from operations also saw a decline of 6.3 per cent year on year and was Rs 90,026 crore during FY21.
The company’s employee expense, though down to a three-year low, increased during the last financial year. It stood at Rs 38,697 crore. CIL is looking at cutting down its employee expense as it reduces work force.
In an interview with this paper in March this year, Pramod Agarwal, CMD, CIL said, “Major cost cuts would be effected through a steadily falling headcount to the tune of 13,000 to 14,000 employees per annum due to superannuation. The fall is likely to increase further making the company leaner and fitter. We plan to stay away from opening mines that attract large manpower induction, meaning employment offers against land acquisition. Our overall expenditure fell by Rs 1,838 crore or 3.3 per cent during the year till December 2020.”
During the year, CIL suffered a decline in demand of coal majorly from its power customers. Electricity demand fell as much as 24 per cent during the peak demand summer months of FY21 due to Covid induced lockdowns, slowdown in commercial and industrial activities. The second wave of Covid in February impacted the coal demand further.
The company reported a decline of 0.9 per cent in coal production and 1.2 per cent in offtake. CIL’s production stood at 596 million tonne and offtake at 574 million tonne during the last financial year. The production volume of the company has gone back to 2017 levels and it was unable to meet the target of crossing 600 million tonne of production.
In the statement submitted to the exchanges, CIL said, “The company is taking continuous measures to combat the adverse impact of COVID-19 and has implemented manifold measures for ease of doing business. The company has considered the possible effects that may arise due to pandemic in the preparation of the financial results including the recoverability of carrying amounts of financial and non-financial assets as on 31st March 2021. The company will continue to closely monitor any material changes arising out of future economic conditions and the resultant impact on its business.”
CIL’s Board of Directors have recommended a final dividend of Rs 3.50 per equity share for FY 2020-21 and is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company to be held for the financial year 2020-21. This is a major reduction from last year when CIL paid a dividend of Rs 12 per equity share) totalling Rs 7,395 crore.