National miner Coal India Ltd (CIL) saw profits drop 23.9% in fiscal year 2020-21 marred by weak demand from the electricity and metals sector due to the Covid pandemic . The company’s net profit stood at Rs 12,720 crore in FY21, up from Rs 16,700 crore a year earlier.
This is a sharp drop for CIL as it struggles with declining demand for coal. In 2016-17, its profit fell by 30% and recovered in 2018-19 with a jump of more than 100%. However, FY20 profit and revenue levels are close to 2017 levels.
The company’s revenue fell 8.5 percent in the last fiscal year. In 2020-2021, the total income was 93,818 crore rupees. Its operating income was also down 6.3% year-on-year and amounted to Rs 90,026 crore in FY21.
The company’s personnel costs, although they fell to their lowest level in three years, increased in the last fiscal year. It stood at Rs 38,697 crore. CIL seeks to reduce its personnel costs while reducing its workforce.
In an interview with this newspaper in March of this year, Pramod Agarwal, CMD, CIL said: “Significant cost reductions would be achieved through a steady decline in headcount to 13,000 to 14,000 employees per year due to retirements. increase more, which makes the company lighter and fitter. We plan to stay away from the opening of mines which attract a great hiring of labor, which means job offers against the acquisition of land. Our overall spending decreased by Rs 1,838 crore or 3.3% during the year through December 2020. “
During the year, CIL suffered from a drop in demand for coal mainly from its electricity customers. Electricity demand fell 24% in 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 further impacted demand for coal.
The company reported a 0.9% drop in coal production and a 1.2% drop in withdrawals. CIL’s production amounted to 596 million tonnes and offtakes to 574 million tonnes in the last financial year. The company’s production volume returned to 2017 levels and it was unable to meet the target of crossing 600 million tonnes of production.
In the statement submitted to the exchanges, CIL said, “The company is taking continuous measures to combat the negative impact of COVID-19 and has put in place many measures to make doing business easier. The company has considered the possible effects that could arise as a result of pandemic in the preparation of financial results, including the collectability of the carrying amounts of financial and non-financial assets as at March 31, 2021. The company will continue to closely monitor any resulting material changes. future economic conditions and the resulting impact on its business. “
The Board of Directors of CIL has recommended a final dividend of Rs 3.50 per share for the fiscal year 2020-21 and is subject to shareholder approval at the company’s annual general meeting (AGM) which is being held. will be held for the 2020-21 fiscal year. This is a significant reduction from last year, when CIL paid a dividend of Rs 12 per share) totaling Rs 7,395 crore.