14 Jul 2009 11:16

Guoyang New Energy expects H1 net profit to grow by up to 100 pct year-on-year

Shanghai. July 14. INTERFAX-CHINA - Shanxi Guoyang New Energy Co. Ltd., a large-sized Shanghai Stock Exchange-listed coal producer, projected that its net profit for the first half of the year would grow by 50 percent to 100 percent from the same period a year ago, according to a company statement released on July 14.

Guoyang New Energy attributed its growth in earnings over the first six months to rising coal prices. Its first half earnings report will be released on Aug. 15. The company earned a net profit of RMB 466.52 million ($68.30 million) in the first half of 2008.

It is possible that Guoyang New Energy's earnings were constrained in 2008 by its annual coal supply contracts with thermal power generators, Yang Tao, a coal industry analyst with KGI Securities, said. As some Chinese coal producers and power generators have not signed such contracts for 2009, the company may have sold its coal at a premium on the spot market in the first half of this year.

"Thanks to anthracite's superior quality over others types of coal, the company has better profit margins than many of its peers, even in unfavorable economic conditions," Yang, who visited the company earlier this year, said.