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BEIJING, Aug 25 (Reuters) - China’s top coal miner China Shenhua Energy Co Ltd on Friday delivered its strongest interim results in four years on the back of soaring coal prices.
Shenhua’s net income leapt 147.4 percent from the same period last year to 24.3 billion yuan ($3.66 billion) under China accounting standards, the highest since the first half of 2013, and in line with the company’s forecasts.
Under IFRS accounting standards, the group’s half-year net income rose to 26.3 billion yuan versus 10.8 billion yuan a year ago.
The results put Shenhua on track to become one of the most profitable public commodity companies in the A share market in Shanghai in the first half, outperforming oil giant PetroChina and Baowu Steel, based on a Reuters analysis of first-half earnings.
Shenhua’s total sales rose to 120.5 billion yuan from only 78.7 billion yuan in the first six months of 2016.
In the second half of this year, Shenhua expects steady growth in coal and power demands, and an increase in coal supply, as some capacity is said to be released.
Shenhua said it had reduced its commercial coal output target to 278 million tonnes and sales target to 396 million tonnes for 2017.
In China, government-enforced mining capacity cuts as part of the war on smog, supply-side reform and strong demand from utilities due to a drop in hydro power have fuelled a spectacular rally in prices since the summer of 2016.
Thermal coal prices soared in the second quarter, extending the run-up to record highs, as people cranked up air conditioners due to a prolonged heatwave, hydropower cuts in southern China and a crackdown on mine safety.
That defied most analysts’ expectations that last year’s rally would run out of steam.
Domestic coal sales prices of Shenhua rose to 425 yuan a tonne in the first half, up from 271 yuan a tonne in 2016.
The Shenhua results come amid speculation of a merger between its parent, Shenhua Group, and energy producer China Guodian Corp.
Sinopec, typically the highest earning listed commodity company in China, will release its interim results on Sunday.
Shenhua’s smaller rivals China Coal and Inner Mongolia Yitai each released their strongest results in years earlier this week.
$1 = 6.6465 Chinese yuan renminbi Reporting by Meng Meng, Muyu Xu and Josephine Mason. Editing by Stephen Coates