China Coal Energy Co. (1898), the nation’s second-biggest coal producer by market value, expects 2013 profit to slump as much as 65 percent because of falling coal prices and the government’s effort to reduce reliance on the commodity.
The company, which posted 8.84 billion yuan ($1.46 billion) of profit in 2012, expects net income for the year ended Dec. 31, 2013 to decrease by 55 to 65 percent under Chinese accounting rules, according to a Hong Kong stock exchange filing today. It cited the “continuing downturn” of the coal market, a “constant decline” in the commodity’s price, an economic slowdown and change in the national energy strategy as reasons for the profit slump.
Coal prices fell 16 percent last year, according to data tracked by Bloomberg. The Chinese government has also pledged to take steps that include cutting coal consumption as part of an effort to reduce air pollution.
The nation, which relies on coal for about 70 percent of energy consumption, plans to cut that level to less than 65 percent this year, according to a plan released by the National Energy Administration today. That target was originally set for 2017.
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