State owned Steel Authority of India (SAIL) has earned a net profit of Rs 1,180 crore in the September quarter owing to the lower price of coal and ‘exceptional gains’.

According to a news report in The Business Line, SAIL chairman CS Verma has said that the price of imported coal, which was $220 per tonne during the second quarter, has come down to $135 per tonne. So, there were savings of Rs 885 crore on this account.

At the same time, SAIL said it got an ‘exceptional’ amount of Rs 1,056 crore from Vale SA, the Brazil-based metals and mining company, towards damages for non-supply of the full quantity of contracted hard-coking coal.

However, two key factors, realisation from sales and provisioning for a wage hike, affected the company’s profitability. SAIL made a provision of Rs 1,150 crore on account of wage settlement, while sales realisation was down by Rs 720 crore.

“Sales realisation during the second quarter of the last financial year was Rs 37,210 a tonne. During this quarter, this came down to Rs 34,230 a tonne – a dip of 6.5 per cent,” Verma was quoted.