China Shenhua Energy Co., the publicly traded unit of the nation’s biggest coal producer, posted a 9.3 percent decline in annual profit as the government began an anti-pollution campaign and coal prices fell.
Net income slipped to 45.1 billion yuan ($7.3 billion) in 2013, or 2.27 yuan a share, from a restated 49.7 billion yuan, or 2.50 yuan, a year earlier, the company said yesterday in a Hong Kong stock exchange filing. That compares with a mean estimate of 43 billion yuan in a Bloomberg survey of 14 analysts. Sales gained 11 percent to 283.8 billion yuan.
Polluting industries such as coal-fired power generation have come under increased scrutiny as Chinese authorities have pledged greater efforts to protect the environment, with Premier Li Keqiang saying this month the nation was “declaring war” on pollution. Dirty air and water have sparked public outrage, with 71 of 74 cities monitored by the government failing last year to meet air quality standards, according to the Ministry of Environmental Protection.
Coal prices have declined 12 percent this year, according to data from the China Coal Transport and Distribution Association. China Coal Energy Co., the nation’s second largest producer, reported a 57 percent decline in 2013 profit while Yanzhou Coal Mining Co. said profit plunged 88 percent.
Shenhua’s Hong Kong-listed shares have dropped 9.6 percent this year, compared to a 5.3 percent slump in the city’s benchmark Hang Seng Index. The stock gained 3 percent to close at HK$22.10 yesterday, before the earnings announcement.
The company said its board has proposed a final dividend of 0.91 yuan a share.