Reuters reported that China Shenhua Energy, the country largest coal producer that also owns power plants, railways and ports posted a 17% rise in net profit for the first half of 2012 beating forecasts on higher sales despite a weakening coal market.
Shenhua said its net profit rose to CNY 26.74 billion in the first six months compared with a restated CNY 22.82 billion a year earlier. That beat an average forecast of CNY 24 billion by five analysts. Total revenue of the company increased 20.1% to CNY 121.5 billion.
Analysts say but the outlook for Shenhua and smaller peers Yanzhou Coal Mining and China Coal Energy is overshadowed by a slowing economy and rising mining costs.
Shenhua said it would realise its full year operating targets by further leveraging its integrated coal railway power generation model and strengthening marketing and cost controls.
Shenhua said in a filing with the Hong Kong stock exchange that "The coal market in China has been experiencing drastic changes since the beginning of the second quarter. Bloated inventory of coal and the significant increase in imported coal rapidly pulled down the price of coal. But it will strive to overcome the challenges to accomplish its annual operating target."
Softening demand from China where the economy is growing at its slowest pace in more than three years has dragged prices of coal, iron ore and other commodities to multi year lows, hurting the profits of global miners such as BHP Billiton and Vale SA.
Shenhua said its commercial coal production rose 11%YoY to 155.8 million tonnes in the first half accounting for 53.7% of its annual operating target. Sales volume jumped 16.2% to 222.1 million tonnes, accounting for 54.1% of its full-year target. Its total power output dispatch rose 15.3% to 95.66 billion kilowatt hours in the first half.
