China’s largest coal company is lowering its operational targets for this year, while making a case for a rosier long-term outlook, according to a fiscal performance conference Monday.
State-owned China Shenhua Energy Company — whose shares are traded in Shanghai and Hong Kong — plans to produce 290 million tons of coal for commercial sales this year, down 6.6 million tons from 2018, due to what it called changes in its mining capabilities.
Shenhua’s coal sales will likely drop around 34 million tons to 427 million tons — a 7% fall from last year — which the company attributed to caution in the industry after mine accidents led to stricter safety inspections and national environmental-protection goals.
Most strikingly, Shenhua expects 2019 operational revenue to fall 16.2% year-on-year, a decline of 221.2 billion yuan ($32.98 billion).
After years of overcapacity in the industry, Shenhua expects a more balanced market supply and demand of coal, even as coal's share of China’s non-renewable energy will continue to decline, company President Ling Wen said.
Ling also said that China’s push to phase out dirtier and less-efficient power sources won’t shake coal’s leading position in energy landscape, at least in the near future.
Shenhua’s operational revenue for 2018 increased 6.2% to 264.1 billion yuan, while profit attributable to its parent company dropped 2.6% to 43.9 billion yuan.