Yanzhou Coal Mining Co, a unit of China's fourth-biggest producer of the fuel, said yesterday first-half profit more than doubled because of rising energy demand and record prices.
Net income increased to 3.91 billion yuan (US$572 million), or 0.80 yuan a share, from 1.5 billion yuan, or 0.31 yuan a share, a year earlier, the company said in a Hong Kong stock exchange filing. Sales rose to 12 billion yuan from 6.7 billion yuan, Bloomberg News reported.
China's economy expanded 10.4 percent between January and June, boosting demand for coal, used to run almost 80 percent of the country's power plants. Benchmark coal prices at China's Qinhuangdao port reached a record 1,080 yuan a metric ton on July 23, according to data posted on the Website of China Coal Transport and Distribution Association.
"As China still sees high economic growth, the demand for coal for electricity, metallurgy, chemical, building materials and other fundamental industries will remain strong," in the second half, Yanzhou Coal said in the statement.
The shares fell 0.2 percent to HK$11.68 (US$1.49) in Hong Kong last Thursday.
The market was closed Friday for a typhoon. The stock has fallen 24 percent this year, compared with the 27-percent drop in the benchmark Hang Seng Index.
The company's raw coal production fell 0.4 percent to 18.01 million tons between January and June, it said. Sales of the fuel rose by 9.1 percent to 18.51 million tons, it said.
Coal prices will remain "at a high level" this year, especially for high-quality thermal coal for power plants, the company said on Wednesday. Yangzhou Coal plans to increase capital spending by 26 percent this year to 3.7 billion yuan to raise production capacity, it said.
China has asked coal producers to boost deliveries to power stations to help ease a sixth year of electricity shortages. The world's biggest coal producer and consumer said it would take additional steps to boost domestic production of the fuel to help ease the nation's electricity crisis.
(Shanghai Daily August 25, 2008)