Yanzhou Coal's 91% jump in profit beats estimates

Beijing: Yanzhou Coal Mining Co, China's fourth-biggest producer, beat analysts' estimates with a 91 per cent gain in first-half profit after demand from the world's fastest-growing major economy boosted prices.

Net income climbed to 5.18 billion yuan (Dh2.97 billion), or 1.05 yuan a share, from 2.72 billion yuan, or 0.55 yuan, a year earlier, the Shandong-based company said in an August 19 statement to the Hong Kong stock exchange. That compares with a mean estimate of 4.87 billion yuan in a survey of four analysts compiled by Bloomberg.

Sales gain 33%

China's economy grew 9.5 per cent from a year earlier in the second quarter, increasing demand for the fuel used to fire about 80 per cent of the country's power plants. The average selling price of Yanzhou's coal rose 15 per cent to 728.93 yuan a metric ton in the first half, according to today's statement.

Higher prices are "benefiting from the persistent strong demand for coal in the domestic and overseas markets," Yanzhou said.

Sales gained 33 per cent to 20.22 billion yuan in the first half as production of unprocessed coal rose 12 per cent to 25.73 million tonnes, Yanzhou said.

Shares soar 37%

Shares of the company rose 37 per cent in Hong Kong trading in the past year, compared with the 7.9 per cent decline in the benchmark Hang Seng Index. The stock slid 7.2 per cent to close at HK$23.10 on Friday, before the earnings announcement.

Yanzhou, which paid more than $3 billion for Felix Resources Ltd. in China's biggest takeover of an Australian company, is seeking assets in Canada, Indonesia and Mongolia to boost output. Profit more than doubled last year on higher sales and coal prices.

The company may raise more than A$1 billion in an initial share sale for at least a third of its Australian unit by the end of the year.