China Coal Energy Company (1898) Q3 2024 earnings summary

Executive summary

• Production, sales, and total profit for the first three quarters of 2024 exceeded budget, with commercial coal output up 1.1% year-on-year, despite lower revenue and coal prices.

• Operational revenue for the nine months ended 30 September 2024 was RMB 140.41 billion, down 10.1% year-on-year, and net profit attributable to shareholders was RMB 14.61 billion, down 12.4%.

• Coal operations gross profit for the period was RMB 29.25 billion, down 7.0% from the prior year, with sales revenue from coal operations falling 11.0% year-on-year.

• The company focused on efficiency, cost control, and stable operations, with advanced capacity releases at key mines.

• Polyolefin sales volume increased 2.7%, while urea and methanol sales volumes declined due to planned overhaul and market conditions.

Financial highlights

• Operating income for the first three quarters was RMB 140 billion, down 10.1% year-on-year, with basic and diluted EPS at RMB 1.10, down 12.7%.

• Net cash flows from operating activities were RMB 25.76 billion, a decrease of 9.2% year-on-year.

• Asset-liability ratio decreased to 47.1%, and owners' equity attributable to shareholders increased 3.7% to RMB 149.50 billion.

• Weighted average return on net assets was 9.95%, down 2.22 percentage points year-on-year.

• Financial business profit rose 11.3% to RMB 1.078 billion.

Outlook and guidance

• Q4 costs are expected to rise due to maintenance and preparation for next year, but annual costs will remain within a reasonable range.

• Coal output in 2025 is expected to remain stable, with incremental growth from Libi and Dahaize mines.

• Coal prices are under pressure but expected to remain stable above worst-case scenarios.

• Urea prices are expected to remain stable in Q4 2024, with no major export policy changes anticipated.