China coal swings to profit on steady sales

Bloomberg

China Coal Energy Co. swung to a profit as it maintained steady sales while production and costs fell.
Net income during the first half of the year was 225 million yuan ($34 million) from a 1.07 billion yuan loss a year ago, the Beijing-based coal producer said in a statement to the Hong Kong stock exchange. Revenue fell 12 percent to 26.3 billion yuan, it said.
Strict cost controls and a recovery in coal prices were among reasons cited by China Coal for the turnaround. The company’s commercial coal sales rose 2.1 percent to 65 million tons in the first half of the year, while production slumped almost 13 percent to 40.4 million tons, the company said last month. Cost of sales dropped 14 percent to 23.3 billion yuan.
“The effect of coal destocking was significant,” the company said in its earnings statement.
“The company methodically organized production and sales, firmly enhanced quality and
improved efficiency, strengthe-
ned budget enforcement, and
strictly controlled the costs and
expenses.”
Coal prices have made a comeback after five years in the doldrums, out pacing earlier this year both oil and natural gas as China’s efforts to reduce mining capacity boosts prices and increases the appetite for seaborne imports.
China’s coal output fell 2.7 percent in July from the previous month to 270 million tons, according to data from the National Bureau of Statistics. Output declined 10 percent during the first seven months of the year.