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China Shenhua Energy Posts $1.94B Profit

Posted on: Friday, 10 March 2006, 12:00 CST

HONG KONG - China Shenhua Energy Co., the mainland's largest coal producer by output, said Friday its 2005 net profit rose 75 percent on increased production and higher prices.

The state-controlled firm, whose operations include coal, ports, rail, and power generation, posted a net profit of 15.63 billion Chinese yuan ($1.94 billion) for the year ended Dec. 31, 2005, up from 8.94 billion yuan the previous year.

The company was reporting full-year results for the first time since its stock market debut in Hong Kong last June.

Earnings were slightly above the average profit estimate of 15.42 billion yuan in a survey of 16 analysts by Thomson Financial. In June, the company said in its listing prospectus that it expected a net profit of at least 14.13 billion yuan for 2005.

Revenue rose to 52.24 billion yuan ($6.45 billion) from 39.27 billion yuan.

Shenhua Energy sold 142.9 million tons (128.6 million metric tons) of coal last year, up 12.6 percent from a year earlier.

The market expects China's domestic coal prices to remain firm in 2006, due to slower supply growth after Beijing's crackdown on unsafe and inefficient coal mines. Demand is expected to remain brisk as more coal-fired plants come online.

China mined 2.19 billion metric tons (2.4 billion short tons) of coal last year, up 9.9 percent from 2004. It is both the world's largest producer and consumer of coal and is a major exporter in the Asia-Pacific region along with Australia and Indonesia.

Shares of Shenhua Energy have risen 64 percent since its June listing to end Friday at HK$11.95, ahead of its result announcement, compared with the initial public offering price of HK$7.50.

Source: Associated Press/AP Online

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