Shen­hua’s profit rises 46% in the first three quar­ters

China Daily (USA) - - BUSINESS - By BLOOMBERG

China’s largest coal pro­ducer saw profit jump 46 per­cent in the third quar­ter amid a price surge fol­low­ing the gov­ern­ment’s ef­forts to curb the over­sup­ply.

Net in­come at China Shen­hua En­ergy Co, the big­gest coal miner in the world’s largest en­ergy con­sumer, rose to 7.48 bil­lion yuan ($1.1 bil­lion) from about 5.1 bil­lion yuan in the same pe­riod last year, the Bei­jing-based com­pany said in a state­ment to the Shang­hai Stock Ex­change.

Coal prices have made a come­back af­ter five years of de­clines be­cause of a re­duc­tion in do­mes­tic sup­ply.

The cen­tral gov­ern­ment ear­lier this year or­dered min­ers to op­er­ate for the equiv­a­lent of 276 days of pro­duc­tion, down from the stan­dard 330 days, as part of its ef­forts to re­vi­tal­ize the in­dus­try and curb in­dus­trial over­ca­pac­ity. This helped spur the na­tion’s bench­mark power-sta­tion coal prices more than 70 per­cent so far this year.

“Shen­hua and China Coal En­ergy Co have ob­vi­ously ben­e­fited from the coal price surge in the pre­vi­ous quar­ter,” Leo Wu, an an­a­lyst with Guo­tai Ju­nan Se­cu­ri­ties Co, said be­fore the earn­ings were re­leased. “China Coal’s out­put de­cline should have been off­set by the price gain.”

China Coal, the sec­ond-big­gest miner, said on Fri­day that net in­come swung to a 401.3 mil­lion yuan profit in the first nine months of the year from a loss of 1.59 bil­lion yuan in the same pe­riod last year.

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