HONG KONG, March 28 China Shenhua Energy Co Ltd
, the country's largest coal producer,
posted a 9.3 percent fall in 2013 net profit, roughly in line
with forecasts, as coal prices slid amid a slowing domestic
The state-run coal mining giant, which also owns power
plants, railways and ports, said its net profit reached 45.1
billion yuan ($7.3 billion) last year, versus restated earnings
of 49.7 billion yuan in 2012. The results compared with a
consensus forecast of 43.4 billion yuan in a Thomson Reuters
poll of 28 analysts.
Thanks to its coal-railway-power generation business model,
Shenhua has been outperforming its smaller peers like China Coal
Energy Co Ltd and Yanzhou Coal Mining Co
Ltd in a weakening market.
China Coal posted a 57 percent slide in its earnings for
2013, while Yanzhou Coal saw its earnings fall 87 percent. Both
companies attributed the profit decline to falling coal prices.
Industry executives say coal prices are likely to remain
weak this year, although coal imports to China will stay at high
While China's coal industry faces overcapacity most major
Chinese mines are in the north and northwest and a lack of rail
infrastructure means mining companies cannot move all of their
coal to the demand centres in the south and east, hence the need
"Coal prices do not look promising this year. The downward
pressure on the (Chinese) economy is pretty big," Yanzhou Coal
Chairman Li Xiyong told reporters at the firm's earnings
briefing in Hong Kong this week. Around 40 percent of Chinese
coal mining companies were in the red last year.
China's benchmark steam coal prices fell 16 percent last
year on the back of an economic slowdown and change in the
national energy strategy to cut coal consumption. After a brief
rebound late last year, prices have been on a steady decline
since January to hover around 553 yuan a tonne.
Shenhua saw its coal sales price fall by an average of 8.7
percent last year, but its coal output rose 4.6 percent to 318.1
Offsetting the impact from lower coal prices, its total
power output dispatch climbed 8.6 percent to 210.18 billion
kilowatt hours, the company said.
($1 = 6.2130 yuan)
(Reporting by Charlie Zhu; Editing by Susan Fenton)