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[Ferro-Alloys.com]China Coal Energy Co. (OTCMKT:CCOZY) posted a huge loss and shrinking revenue in Y 2015 as the saturated coal industry has begun to bite into corporate profitability.
The Shanghai-listed (SS:601898) mining company posted losses of RMB 2.52-B (US$390-M) last year, a sharp contrast with profits of RMB 767-M in Y 2014, according to its latest financial report Wednesday.
Its total revenue dropped 16.1% Y-Y to RMB 59.27-B for the whole year.
The state-owned coal producer suffered as domestic coal prices continued to drop last year, according to the company’s board chairman Li Yanjiang, who attributed the lackluster performance to an over-supplied market.
The Bohai-Rim Steam-Coal Price Index, a benchmark index, stood at 370 Yuan per tonne by the end of Y 2015, markedly down from 525 Yuan per tonne at the beginning of the last year.
Responding to the situation, the company cut production at less-competitive coal mines and transferred business to the more profitable coal processing sector, the report said. Its new coal chemical plants raked in RMB 1.5-B in profit last year, which offset the loss from leaden coal mining.
Coal mining is 1 of several heavy industries struggling with serious overcapacity during the economic slowdown, which has made many coal mines redundant, with less than 80% of the capacity actually under operation.
The problem has become a priority, and the government has promised to slash 500-M tonnes of coal capacity in the next 3 to 5 years.
By the end of Y 2015, the country had a total coal production capacity of 5.7-B tonnes.
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