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Soaring coal prices give Yanzhou lift

Yanzhou Coal

Soaring coal prices in the mainland may have hit a number of listed companies badly but they have benefited at least one - H share Yanzhou Coal Mining.

The Shandong-based mining and distribution company yesterday said net profit jumped a year on year 55.8 per cent to 696.38 million yuan (about HK$652.71 million) for the first six months of the year.

The company attributed profit growth to higher domestic and export coal prices and a maiden contribution from a newly acquired coal transportation asset.

Yanzhou Coal said its average coal price stood at 173.4 yuan per tonne, a 14.6 per cent increase over last year. Its average domestic coal prices surged 18.7 per cent while the average export price jumped 7.6 per cent in the first half.

The coal price increases eroded the interim profitability of major mainland independent power producers such as H shares Huaneng Power International, Beijing Datang Power Generation and Shandong International Power Development.

Of these, Shandong International suffered the most, with fuel costs rocketing 31 per cent in the first six months. Huaneng fared a bit better, with a 22.77 per cent increase.

During the first half, Yanzhou Coal's net sales swelled 25.4 per cent to 2.92 billion yuan, with healthy growth recorded in domestic market and exports.

Domestic net sales rose 17.5 per cent to 1.58 billion yuan while export net sales performed even better, up 36.2 per cent to 1.34 billion yuan.

Earnings per share stood at 0.243 yuan, a 49 per cent increase from the previous period. No interim dividend was proposed.

Its coal transport asset contributed a 66.22 million yuan net income since it was acquired at the beginning of the year.

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