Yanzhou Coal Mining Co. (1171), China’s fourth-largest producer of the fuel, reported a preliminary first-half net loss of about 2.35 billion yuan ($383 million) because of exchange-rate losses and declining coal prices.
The company apologized that the results were worse than it forecast in April and said future projections will be more scientific and accurate, according to a Hong Kong stock exchange filing yesterday. Yanzhou forecast on April 25 that first-half net income would drop 75 percent from last year’s 4.91 billion yuan.
Power-station coal in China fell to a four-year low, a range of 560 yuan to 575 yuan a metric ton, on July 28 as industrial demand declined amid evidence the economy is slowing, the China Coal Transport and Distribution Association said yesterday. Prices have dropped in the past six weeks.
One reason Yanzhou missed its forecast was a change in exchange rates, which cut net income by 1.79 billion yuan more than previously estimated, according to the statement. The company also said impairments on the value of some of its mines were 1.12 billion yuan more than expected and falling prices for its coal products reduced first-half net income by an additional 890 million yuan more than projected.
Last week, the Shandong province-based company said Chairman Li Weimin and Vice Chairman Wang Xin resigned due to “work allocation” without giving further explanation. Today’s preliminary profit statement didn’t mention the resignations.
China’s coal demand rose 1.8 percent in the first six months of 2013 to 1.93 billion tons, the China National Coal Association said in a statement on July 18. The gain was 1 percentage point down from the same period last year and 7.6 points lower than in 2011.
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