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China Shenhua Energy 2014 profit falls 19% on coal price slide

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World Coal,

China Shenhua Energy Co Ltd, China's biggest coal miner, has posted a 19.4% fall in 2014 net profit citing a supply glut and slower demand growth that hurt prices.

The state-run company, which also owns power plants, railways and ports, recorded a net profit of 36.8 billion yuan (US$5.93 billion), down from 45.1 billion, it said in an exchange filing.

The fulfilled its 2014 targets amid "very complex and difficult conditions", it said.

70% of China's coal miners are losing money, hurt by chronic oversupply, cooling demand growth and a government environmental campaign.

Coal prices fell by 16% in 2014 and have lost another 6.6% this year.

China, also the world's top coal consumer, is trying to provide support for the sector by cracking down on illegal production, suspending new mine approvals and restricting imports.

Shenhua said in February that it would cut its production target by 10.8% to 273.6 million t this year aiming to ease oversupply and lift prices.

Its average coal sales price fell 10.6% to 351.4 yuan per tonne last year, the company said, while its production fell 3.6% to 306.6 million t.

For the first time in more than a decade, China's coal output and consumption fell last year, shrinking by 2.5% and 2.9%, respectively.

Edited from source by Joseph Green

Source: Reuters

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