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China Yanzhou Coal sinks into red in H1

Yanzhou Coal Mining, the listed unit of China's fourth largest coal miner Yankuang Group, plunged into the red in the first half of the year, as cost reduction was insufficient to counter the impact of a sharp drop in coal prices and sales volume.

Net loss amounted to 50.63 million yuan ($7.91 million) in the half, compared with a profit of 587.24 million yuan in the year-earlier period.

First-half revenue plummeted 41.4% year on year to 18.14 billion yuan, on the back of a 27.6% decline in coal sales to 43 million tonnes, and a 24.1% tumble in average selling price to 505 yuan/t.

Output of processed saleable coal produced by its own mine fell 5% year on year to 32 million tonnes in the first half.

First-half operating profit from coal mining dropped 14% year on year to 406.41 million yuan, which came despite the firm slashing its production cost per tonne by about 15% year on year at its domestic mines, and by 24-28% at its overseas mines.

Yanzhou said it has cut costs mainly by downsizing staff, "optimization of human resource", streamlining of production systems and processes, and by cutting materials consumption.

In the year's second half, it said, it would continue to cut costs by "centralized purchasing, competitive negotiation and online procurement for materials and equipment" to control costs.

Fellow state-backed China Shenhua Energy, the listed unit of the country's largest coal miner Shenhua Group, last week posted a 53.8% year-on-year slump in its coal mining operation's operating profit.

China Coal Energy last week posted a first-half operating loss of 720 million yuan on its coal mining operation, compared with a profit of 2.36 billion yuan in the year-earlier period.

source: http://en.sxcoal.com