The state mining company Coal India experienced a decline in profit for the second consecutive quarter in April-June this year, citing increased provisions for wage hikes as a key factor.

According to an official exchange filing, the company's consolidated net profit dropped by nearly 10% to 79.71 billion rupees ($962.4 million) for the first quarter ending on June 30 for the current fiscal.

This marks a continuation of the trend seen in the January-March quarter, during which the company's profit fell by 17.3%, halting a remarkable profit growth streak of over 45% in every quarter since the period ended December 2021.

Coal India pointed out that provisions made for wage hikes surged to 8 billion rupees from 3.24 billion rupees compared to the previous year, thereby squeezing its profit margin.

Further impacting its financial performance was the sluggish revenue growth, which increased by a meager 2.5% to 359.83 billion rupees. This was attributed to significant declines in coal prices during the quarter.

The company, based in Kolkata, stated that it observed a reduced realization per tonne of coal, amounting to 3,740.84 in the auction segment during the first quarter. This reflects a decline of 13.8% from the previous year.

Coal India exceeded its annual production target of 700 million tonnes during FY 2022-2023, marking the first instance of surpassing this goal since fiscal year 2006.

The company produced 53.6 million tonnes of coal in July, up 13.4% from the same period last year. This brought the total production to 229.1 million tonnes in the first four months of this fiscal, up 10.7% from the same period last year.

(Writing by Alex Guo  Editing by Emma Yang)
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