- Income tax declined 70% y-o-y, mainly on Yancoal Australia
- Recovered from a loss of 50.6 million yuan in first-half 2015
Yanzhou Coal Mining Co. swung to a profit in the first half of the year as its tax charge fell 70 percent from the previous period, mainly on lower liabilities on its Australian assets, helping the company overcome weaker output and prices.
The Shandong-based coal producer posted a 375 million yuan ($56 million) profit, compared with a loss of 50.6 million yuan a year ago, the company said in a statement to the Hong Kong stock exchange on Aug. 26. Sales declined 31 percent to 12.6 billion yuan, while the average sales price for the group fell 15 percent.
The company’s income taxes tumbled to 72.5 million yuan, mainly due to a decrease of 207.5 million yuan from a year earlier on its Australia unit Yancoal Australia Ltd., which lost A$180 million ($136 million) in the first half of the year. Yanzhou Coal’s interest expenses also fell 25 percent from the previous period.
Raw coal output dropped 9.6 percent to 31.6 million tons in the first half and sales volumes slid 24 percent to 32.6 million tons, according to the statement. Yanzhou Coal will cut as much as 9.4 million tons of coal capacity this year, including 6.5 million tons in Shandong province, General Manager Wu Xiangqian said at a briefing Monday.
Yanzhou Coal shares fell 0.5 percent to close at HK$4.30 in Hong Kong. The city’s benchmark Hang Seng Index slipped 0.4 percent.
Making a Comeback
Coal prices have begun to make a comeback after five years in the doldrums, outpacing both oil and natural gas earlier this year, as China’s efforts to reduce mining capacity boosts domestic prices and increases appetite for seaborne imports. China’s coal output fell 2.7 percent in July from the previous month to 270 million tons, according to data from the National Bureau of Statistics. Output declined 10 percent during the first seven months of the year.
China Shenhua Energy Co., the country’s biggest coal producer, reported Friday a 19 percent profit decline in the first half of the year, citing a stagnant coal market and lower power tariffs. China Coal Energy Co., another state-owned coal miner, returned to profit, the company said on Aug. 24, citing strict cost controls and disposal of assets.