Hidili’s loss bloated by mine shutdowns

PUBLISHED : Friday, 08 August, 2014, 9:28am
UPDATED : Friday, 08 August, 2014, 9:28am

Chinese coal miner Hidili Industry International Development disclosed on Friday a loss of 968.68 million yuan (HK$1.22 billion) in this year’s first half.

That was 3.6 times greater than the loss reported by the firm in the same period last year.

Almost all the loss this year was attributable to costs incurred in shutting down mines.

Hong Kong-listed Hidili said in an exchange filing that the mainland government is pressing the firm to shut operations in Sichuan and Guizhou provinces, as part of a wider campaign to reduce capacity in the mainland’s bloated coal mining sector.

The firm said it suffered impairment costs of 709.55 million yuan as it wound down mines and wrote off equipment and structures.

Moody’s downgraded Hidili in August last year to Caa1, reflecting weak cash flows and high refinancing risks.

The firm disclosed in its interim results net liabilities of 3.1 billion yuan, up fractionally from the 3 billion yuan disclosed at the end of last year.