HONG KONG, March 28 (Reuters) - 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 economy.
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 levels.
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 for imports.
“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 million tonnes.
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)