Yunnan Coal & Energy Co., Ltd. realized 12.23 million yuan ($1.83 million) of net profit in the first three quarters of 2020, plunging 94.2% from the same period of last year, the company disclosed on October 27.
Its operating income slid 19.6% year on year to 3.41 billion yuan during the period.
The sharp decline in operating profit was mainly due to reduced demand and prices of coke and coal chemical products and relatively high raw material prices, it said in a statement.
In the first three quarters, the company produced 1.54 million tonnes of coke, edging up 0.36% year on year, and coke sales reached 1.59 million tonnes, up 0.34% from the previous year. Coke selling price averaged 1,644.50 yuan/t, excluding VAT, a 17.89% fall on the year, leading sales income to shrink 17.61% year on year.
Prices of key raw material – coking coal – dropped at a lesser extent, causing a decline in gross profit. Supply of coking coal was tight, owing to consolidation of the coal industry in Yunan and reduced supply from neighboring Guizhou, where mines were asked to secure supply for power generation, according to the statement.
Yunnan Coal & Energy purchased 2.03 million tonnes of washed coal in the first three quarters, 1.63% lower than a year ago, at an average price of 1154.77 yuan/t, excluding VAT, a year-on-year decline of 12.99%.
Yunnan Coal & Energy's main businesses include coking, equipment manufacturing, coal chemical, raw coal mining and engineering construction, accounting for 82.15%, 8.42%, 7.17%, 1.28%, and 0.34% of total revenue respectively, according to its annual report in 2019.
(Writing by Shengnan Liu Editing by Harry Huo)
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