Bargain Australian Mine Boosts Chinese Coal Miner’s Waning Profits
What’s new: Yancoal Australia Ltd., the overseas arm of Chinese state-owned Yanzhou Coal Mining, saw its profits increase by 7% year-on-year in the first half of 2020, even as its operating earnings plummeted.
Yancoal made A$605 million ($434 million) in profits thanks to a one-off A$653 million gain from its bargain acquisition of an additional 10% of eastern Australia’s Moolarben coal mine.
The company’s revenue dropped 8% year-on-year to A$4.46 billion and its operating earnings before interest and tax slumped 85% to A$95 million, according to an interim report filed to the Hong Kong Stock Exchange on Wednesday.
What’s the background: Yancoal Australia told investors it is on track to deliver on a production target of 36 million tons of coal, a goal it set earlier this year, but the coronavirus pandemic is still weighing heavily on the company’s performance.
“We expect that the COVID-19 pandemic will continue to have an impact on the international coal markets and our revenue profile for the remainder of 2020,” Yancoal Australia CEO David Moult said in the report.
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