Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Yanzhou Coal Now Sees Net Loss After Forecasting Profit

July 30 (Bloomberg) -- Yanzhou Coal Mining Co., China’s fourth-largest producer of the fuel, reported a preliminary first-half loss after forecasting a profit in April. Shares fell the most in more than six weeks.

The company, based in Shandong province, reported a net loss of about 2.35 billion yuan ($383 million),citing exchange-rate losses and declining coal prices, 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.

Yanzhou Coal slumped 7.1 percent to HK$5.39 in Hong Kong trading as of 11:59 a.m. local time, set for the biggest decline since June 13.

Yanzhou missed its forecast as a change in exchange rates 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.

Earnings Outlook

“The substantial deviation from Yanzhou’s previous estimates is driven by a larger impact from one-off items,” Barclays Plc analyst Ephrem Ravi said in an e-mailed note dated yesterday. Earnings in the second half are “likely to be challenged by a weaker second quarter and mark-to-market downside in coal prices.”

Yanzhou Coal apologized that the first-half results were worse than it forecast in April and said future projections will be more scientific and accurate.

The company said on July 22 that Chairman Li Weimin and Vice Chairman Wang Xin resigned due to “work allocation”, without giving further explanation. The preliminary profit statement didn’t mention the resignations.

China’s coal demand rose 1.8 percent in the first six months of this year 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.

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.