China coal profit rises 9.9% as economy grows
2010-Apr-23 10:29:11

China Coal Energy Co, a unit of the nation's second-biggest producer of the fuel, said 2009 profit rose 9.9 percent as expansion in the world's fastest-growing major economy buoyed demand.

Net income increased to 7.83 billion yuan ($1.1 billion), or 0.59 yuan per share, from 7.13 billion yuan, or 0.54 yuan, a year earlier, the company said in a statement to the Hong Kong stock exchange. That compares with a median estimate of 8.4 billion yuan in a Bloomberg survey of 11 analysts. Sales grew 2.8 percent to 53.2 billion yuan.

China Coal's production advanced 8.2 percent last year as the nation's economy rebounded, spurring demand for the fuel that powers more than two thirds of the country's generators. Benchmark thermal coal prices at Qinhuangdao, China's largest port for the fuel, surged 32 percent in 2009, according to data from the China Coal Transport and Distribution Association.

Last year was "a year full of challenges for the domestic coal industry," China Coal said in the statement. "In 2010 the coal production and consumption in China will maintain fast growth and the overall market demand and supply will be generally balanced."

Still, changes in government taxation policies may weigh on coal companies and cost control pressures will increase as inflation picks up, the company said in the statement.

Output target

The Beijing-based miner produced 108.56 million tons of raw coal last year and aims to boost output by 15 million tons this year, according to the statement. The company is targeting production of 200 million tons in 2014.

In a separate statement, China Coal said net income in the first quarter rose 42.7 percent from a year earlier to 1.98 billion yuan, or 0.15 yuan per share. Sales increased 55.1 percent to 15.6 billion yuan.

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The shares have risen 86 percent in the past 12 months in Hong Kong trading, outstripping the 44 percent gain in the benchmark Hang Seng index.

The energy supplier may post a profit of 10.8 billion yuan this year as China's economic growth spurs demand for coal, according to a median estimate of 11 analysts compiled by Bloomberg.

Sales in March rose 67 percent compared with the same period last year, China Coal said April 14. The nation's economy grew 11.9 percent in the first quarter, with industrial production climbing 18.1 percent last month.

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