China Shenhua posts 143 per cent interim profit growth on higher coal prices and steady unit production cost
China Shenhua Energy, the listed flagship of the nation’s largest coal miner Shenhua Group, posted a 143 per cent year on year rise in net profit to 26.3 billion yuan (US$3.95 billion) for the year’s first six months, on the back of higher prices of the fossil fuel.
The profit, which matches its own projection late last month, amounted to 70.9 per cent of the 37.1 billion yuan full year average estimate of 17 analysts polled by Bloomberg.
“In the year’s second half, global coal demand is expected to continue to rise on the back of recovery of the global economy, albeit constrained by the structural adjustment of energy consumption [towards cleaner energy],” it said in a filing to Shanghai’s bourse.
“Global coal demand and supply are expected to be in balance, and power station coal prices are expected to fluctuate with seasonal demand.”
First half revenue surged 53.1 per cent year on year to 120.5 billion yuan, on the back of a 18.4 per cent rise in sales volume to 220.5 million tonnes and a 56.8 per cent rise in average selling price to 425 yuan a tonne.
Output from its own mines grew 8.6 per cent to 151.7 million tonnes, whose per tonne production cost grew just 1.5 per cent year on year to 106.7 yuan.
Revenue of the energy giant, which is also one of the nation’s biggest power producers, was also lifted by a 10.1 per cent year on year increase in power sales volume.
In the year’s first half, the company has completed 33.3 per cent of its full year capital expenditure budget of 29.3 billion yuan.
Near two-thirds of the first half spending was on its power generation business, 21 per cent was used on its logistics operations and only 13.4 per cent on its coal mining business.
China Shenhua shares have gained 54.6 per cent year to date, outperforming the Hang Seng Index’s 26.6 per cent rise.