China coal giant Shenhua cuts 2013 sales target after profit fall
HONG KONG Oct 25 (Reuters) - China Shenhua Energy Co Ltd , the country's largest coal producer, posted a 22 percent drop in third-quarter net profit, due to weak coal prices caused by ample supplies and flagging demand.
The coal mining giant, which also owns power plants, railways and ports, also lowered its sales target for 2013 by 5.4 percent to 256.8 billion yuan ($42 billion), reflecting sluggish markets.
Chinese coal prices fell around 16 percent in the first three quarters of the year due to sluggish demand, putting miners under strain but reducing costs for power producers.
Other coal producers in the region also reported weak earnings on Friday, including China Coal Energy Co Ltd's , Yanzhou Coal Mining Co Ltd <1171.HK and Inner Mongolia Yitai Coal Co Ltd .
Shenhua said its net profit for the first nine months reached 34.3 billion yuan, versus 38.8 billion yuan a year earlier, under international accounting standards.
Third quarter earnings fell to 9.4 billion yuan from 12.1 billion yuan a year earlier, according to Reuters calculations.
"The stable and promising trend of the macro-economy is expected to result in steady energy demand. With the seasonal growth in demand for coal driven by heating in winter, coal prices will stabilise gradually," Shenhua said.
On Friday, China Coal Energy said its January-September net profit fell 47.9 percent to 3.7 billion yuan, while Yitai Coal reported a 47.5 percent in net profit to 3.06 billion yuan.
Another major Chinese producer Yanzhou Coal swung to a net loss of 588.6 million yuan in the first nine months.
China's coal market will remain amply supplied into the fourth quarter despite peak winter consumption and the fundamentals are expected to remain much the same in 2014, local media reported on Tuesday, citing the China Coal Transportation Association.
Earlier this week, Shenhua said it expected the recent government cuts of power tariffs would reduce its pre-tax profit by about 610 million yuan this year.
Shares of Shenhua closed down 1.26 percent at HK$23.6 on Friday. (Reporting by Charlie Zhu and Twinnie Siu. Editing by Jane Merriman)