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Higher costs erode China Shenhua Energy's third-quarter profit

Mainland coal producer also blames lower selling prices for 4pc drop in quarter's income

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Coal being loaded at a dock in Shanghai. China Shenhua Energy's sales rose but they were offset by lower selling prices. Photo: Bloomberg

China Shenhua Energy, the listed unit of the nation's largest coal producer Shenhua Group, posted a 4 per cent drop in third-quarter net profit, as lower coal selling prices and higher production costs offset increased sales.

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Net profit was 12.1 billion yuan (HK$15 billion), compared with 12.6 billion yuan in the same period last year. For the first nine months, profit grew 9.1 per cent to 38.85 billion yuan.

Sales volume in the nine months rose 15 per cent, while the average selling price fell 2.3 per cent and production cost per tonne grew 9.6 per cent.

Meanwhile, Yanzhou Coal Mining, the listed unit of the nation's fourth-largest coal producer Yankuang Group, made a net loss of 79.6 million yuan in the third quarter, against a profit of 1.08 billion yuan a year earlier.

Revenue rose to 12.9 billion yuan from 12.1 billion yuan.

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Net profit in the nine months to September fell 21 per cent year on year to 4.83 billion yuan, despite revenue surging 26 per cent to 42.1 billion yuan.

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