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DaTong Coal swings to 438.5M yuan Q1 net profit on windfall from coal mine sale

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DaTong Coal swings to 438.5M yuan Q1 net profit on windfall from coal mine sale

said April 28 that it swung to net profit attributable to shareholders of 438.5million Chinese yuan, or 26 fen per share, in the first quarter, from a netloss of 298.2 million yuan, or 18 fen per share, posted a year ago.

Forthe first quarter, operating income dropped 28.06% year over year to 1.41billion yuan, while operating cost was cut by 23.3% to 1.65 billion yuan from2.15 billion yuan.

First-quarternonoperating income jumped to 733.0 million yuan from 1,000 yuan posted in thesame quarter of 2015 as the company received prepayment for the 1.83 billionyuan sale of theYanzishan coalproject in Shanxi province, north China.

Thecompany expected to see a "significant year-on-year improvement" inearnings for the first half, on the back of income from the Yanzishan deal.DaTong Coal posted anet loss of 711.2 million yuan in the first half of 2015.

Totalcoal production for the quarter was 7.8 million tonnes, down 13.02% from a yearago. Coal sales dropped 18.56% to 4.6 million tonnes.

Forfull year 2015, the company shifted to net loss of 1.80 billion yuan, or 1.08yuan per share, which compares to a net profit of 149.0 million yuan, or 9 fenper share, in 2014.

DaTongCoal attributed the net loss to slowing economic growth in China, increasedpressures on environmental protection, overcapacity and significant declines incoal prices.

Thecompany suspended dividend payments for 2015, while it declared an annualdividend of 27 fen per 10 shares in 2014.

Operatingincome declined 17.84% year over year to 7.13 billion yuan, among which coalsales recorded income of 6.88 billion yuan, down 18.55% from a year ago.

Operatingcosts reached 4.59 billion yuan, down 15.32% from 2014. Finance costs jumped to400.6 million yuan from 184.9 million yuan due to an increase in interestexpenses.

Forthe full year, coal output increased 15.20% year over year to 34.9 milliontonnes while total sales dropped 1.27% to 23.3 million tonnes.

"Itwould take at least three years for the coal industry to rebound. This yearwill be the most difficult year for the industry as a whole," the companysaid, adding that more capacity reduction programs and restructuring deals canbe expected this year.

Thecompany plans to produce 20.2 million tonnes of coal this year and the totalsales volume is targeted at 20.3 million tonnes.

Full-yearrevenue from coal sales is expected at 6.29 billion yuan while the productioncost of coal is expected to be cut by between 15% and 30% from 2015.

As of April 28, US$1 wasequivalent to 6.48 Chinese yuan.