Yanzhou Coal Mining Company Limited Announces Annual Results 2014

Yanzhou Coal Mining
2015-03-30 15:35 2537

HONG KONG, March 30, 2015 /PRNewswire/ -- Yanzhou Coal Mining Company Limited ('Yanzhou Coal' or the 'Company'; together with its subsidiaries collectively known as the 'Group'; stock code: 1171) today announced its annual results for the year ended 31 December 2014 (the "Year").

In face of unprecedented difficulties and challenges in 2014, through adopting innovative thinking and implementing a series of operation management measures to adjust costs of sales to enhance profit, optimize marketing strategy and strengthen management capability to improve efficiency,  Yanzhou Coal presented an excellent posture of stable and positive results with strong endogenous driving force and greater development potentials.

For the year ended 31 December 2014, sales income of the Group amounted to RMB60.37 billion, representing an increase of 7.0% year-on-year. Net income stayed flat at RMB766 million (2013: RMB777 million). Earnings per share amounted to RMB0.16, maintaining at same level as 2013. The Board of Directors proposes to declare a cash dividend of RMB0.02 per share for the year ended 31 December 2014 (2013: RMB0.02).

Under the prolonged market downturn and oversupply grim situation, the Group insisted on adopting innovative sales model, expanding sales channels and strengthening efforts on market expansion, thus successfully achieving sale volume growth. The Group's total sales volume of coal was 123 million tonnes, up 18.3% year on year. Of which, sales volume of the headquarters was 34.75 million tonnes, sales volume of Yancoal Australia was 15.74 million tonnes, sales volume of ShanXi Neng Hua was 1.50 million tonnes, sales volume of Heze Neng Hua amounted to 3.11 million tonnes, and Ordos Neng Hua contributed a sales volume of 5.79 million tonnes. The Group continued to expand the business of the sales of externally purchased coal. Sales volume of externally purchased coal reached 57.02 million tonnes, up 44.7% year-on-year, setting the foundation for the implementation of domestic and international integrated marketing strategy.

In response to the increasing difficulties to generate revenue and profit margins were being squeezed in both domestic and overseas coal markets, the Group continued to flexibly adjust its product mix, optimize sales and marketing strategies, improve quality of the products and aftersales services, in order to achieve stable sales volume and profits. During the Year, the average selling price of coal of the Company in the headquarters decreased by 17.7% to RMB439.94 per tonne, that of Shanxi Neng Hua down by 25.4% to RMB210.69 per tonne, that of Heze Neng Hua down by 13.6% to RMB525.65 per tonne, that of Ordos Neng Hua down by 13.5% to RMB163.02 per tonne, and that of Yancoal Australia dropped by 19.2% to RMB463.77 per tonne.

In 2014, the coal chemical business of the Group registered a year-on-year increase in sales income of 3.4% to RMB1,195 million. The Group recorded sales of methanol 660,000 tonnes, up 10.0% year on year.  

During the Year, through the implementation of the "Three Reductions and Three Enhancements" strategy in full scale to increase profitability through cost reduction, both domestic and overseas mines had been successfully achieved the cost control targets set at the beginning of 2014.

Meanwhile, the Group continued to speed up the construction process of key projects as well, including the full operation of the Zhaolou power plant of Heze Neng Hua. Both Zhuan Longwan coal mine of Ordos and the 600,000-tonne methanol project commenced the trial operations.  Yancoal Australia achieved a sharp cut in loss and significant improvement of assets and liabilities structure. Phase II of Moolarben coal mine project has been approved, revealing the bright prospect for business development. Through active negotiations by Yancoal International, the contracted coal prices of Premier mine had been increased, resulting in an enhancement on the profitability. The pre-feasibility study of Canadian potash project was approved, then the pilot layout of the Group's internal and external development plan was basically established.

The coal sales target of the Group in 2015 is 122 million tonnes, which includes the headquarters' sales target of 35.40 million tonnes, Shanxi Nenghua's sales target of 1.50 million tonnes, Heze NengHua's sales target of 4.0 million tonnes, Ordos NengHua's sales target of 7.80 million tonnes, Yancoal Australia's sales target of 13.88 million tonnes, Yancoal International's sales target of 6.52 million tonnes and trading volume of externally purchased coal targeted to be 52.90 million tonnes. The Group also plans to sell 1.40 million tonnes of methanol.

Looking ahead, Mr. Li Xizong, Chairman of Yanzhou Coal said, "In 2015, it is expected that the oversupply of coal in both domestic and overseas markets will remain and the coal price fluctuation will slow down due to the influences from the industry policy by controlling and limiting the production. The Group formulated the development strategies for the next decade with the goal of establishing the business to be more internationalized, environmental friendly and value-oriented, and the development of resource synergy, regional synergy, market synergy and industry-finance synergy. The Group strives to be an international integrated clean energy supplier which is innovation leading, value driving and an outstanding brand to promote coal mining to transfer towards green and low carbon development, production and operation to transfer towards integrated services and resources allocation to transfer towards globalized market, in order to build Yanzhou Coal into an international company with investment value and brand influence."

"Furthermore, the Group aims to achieve developing strategy and mainly focus on the implementation of the whole process of value reengineering through "Three Reductions and Three Enhancements", creative thinking, speed up the industrial upgrading and product mix adjustment, actively respond to the complex market situation, promote the Group's efficient progress and strive to maximize efficiency and improve its profitability and returns to shareholders."

Company Background

Yanzhou Coal is located in Shandong Province, PRC and owns coal resources and coal processing projects in Shandong Province, Shaanxi Province, Shanxi Province and Inner Mongolia in the PRC, as well as Australia. The Company also possesses potash resources in Canada. The Company is an international mining group with coal, coal processing, power electricity and potash resources. Yanzhou Coal is also the only domestic coal company listed in stock exchange markets in China, Hong Kong, US and Australia.

Source: Yanzhou Coal Mining
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