WEB NEWS Comments & Business Outlook
YANZHOU COAL MINING COMPANY LIMITED AND ITS SUBSIDIARIES
Year ended December 31,
NOTES
2014
2013
2012
RMB’000
RMB’000
RMB’000
GROSS SALES OF COAL
7
58,539,353
54,444,843
56,200,600
RAILWAY TRANSPORTATION SERVICE INCOME
373,617
457,898
464,068
GROSS SALES OF ELECTRICITY POWER
241,490
332,125
323,646
GROSS SALES OF METHANOL
1,195,458
1,155,742
1,117,952
GROSS SALES OF HEAT SUPPLY
20,846
11,218
39,918
TOTAL REVENUE
60,370,764
56,401,826
58,146,184
TRANSPORTATION COSTS OF COAL
7
(2,291,594
)
(2,024,196
)
(2,104,225
)
COST OF SALES AND SERVICE PROVIDED
8
(49,557,502
)
(42,511,838
)
(42,148,988
)
COST OF ELECTRICITY POWER
(159,724
)
(320,515
)
(330,803
)
COST OF METHANOL
(869,294
)
(850,788
)
(911,203
)
COST OF HEAT SUPPLY
(11,236
)
(6,709
)
(25,130
)
GROSS PROFIT
7,481,414
10,687,780
12,625,835
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
9
(6,069,884
)
(10,380,713
)
(7,987,636
)
SHARE OF PROFIT OF ASSOCIATES
27
310,604
233,897
141,986
SHARE OF LOSS OF JOINT VENTURES
30
(320,829
)
(376,032
)
(191,575
)
OTHER INCOME
10
2,382,186
1,020,577
2,930,445
INTEREST EXPENSES
11
(2,183,581
)
(1,765,777
)
(1,448,679
)
PROFIT (LOSS) BEFORE INCOME TAXES
13
1,599,910
(580,268
)
6,070,376
INCOME TAXES
12
(1,112,807
)
394,815
(36,189
)
PROFIT (LOSS) FOR THE YEAR
487,103
(185,453
)
6,034,187
Attributable to:
Equity holders of the Company
766,158
777,368
6,065,570
Owners of perpetual capital securities
41
36,456
—
—
Non-controlling interests
- Perpetual capital securities
41
82,079
—
—
- Other
(397,590
)
(962,821
)
(31,383
)
487,103
(185,453
)
6,034,187
EARNINGS PER SHARE, BASIC AND DILUTED
16
RMB 0.16
RMB 0.16
RMB 1.23
EARNINGS PER ADS, BASIC AND DILUTED
16
RMB 1.56
RMB 1.58
RMB 12.33
Management Discussion and Analysis
Total revenue
Our total revenue increased by RMB3,968.9 million, or 7%, from approximately RMB56,401.8 million in 2013 to approximately RMB60,370.76 million in 2014. Our gross sales of coal, which accounted for 96.7% of our total revenue in 2012, increased by RMB4,094.96 million, or 7.5%, from approximately RMB54,444.8 million in 2013 to approximately RMB58,539.4 million in 2014. The increase in gross sales of coal was primarily due to the increase in the sales volumes of our externally purchased coal products, partially offset by a decrease in the average selling price of our coal products. In 2014, our average selling price of coal products decreased by approximately RMB47.9 per tonne, from RMB523.53 to RMB475.64 per tonne, a 9.1% decrease from 2013. Our sales volume of coal products increased by 18.3% from approximately 104.0 tonnes in 2013 to 123.1 million tonnes in 2014, primarily due to the increase in the sales volumes of our externally purchased coal products to maintain our market share.
In 2014, the transportation volume of our railway assets was approximately 16.6 million tonnes, representing a decrease of approximately 1.7 million tonnes, or 9.2%, from 2013. Our railway transportation services income (income from transported volume settled on the basis of off-mine prices and special purpose railway transportation fees borne by customers) decreased by RMB 84.3 million, or 18.4%, from approximately RMB457.9 million in 2013 to approximately RMB373.6 million in 2014.
Our gross sales of methanol increased by approximately RMB39.7 million, or 3.4%, from RMB1,155.7 million in 2013 to approximately RMB1,195.6 million in 2014. The increase in gross sales of methanol was mainly attributable to an increase in sales volumes of methanol. Our gross sales of electric power decreased by approximately RMB90.6 million, or 27.3%, from approximately RMB332.1 million in 2013 to approximately RMB241.5 million in 2014. Our gross sales of heat supply increased by RMB9.6 million, or 85.8%, from approximately RMB11.2 million in 2013 to approximately RMB20.8 million in 2014, due primarily to an increase in sales volumes of heat.
As a result, we recorded profit for the year of approximately RMB487.1 million in 2014, as compared to loss for the year of approximately RMB185.5 million in 2013. In particular, net profit from our trading of externally purchased coal in 2014 was approximately RMB201.3 million. The profit attributable to equity holders of the Company decreased by RMB11.2 million, or 1.4%, from approximately RMB777.4 million in 2013 to approximately RMB766.2 million in 2014.
Liquidity Requirements
2010 20F:
We have historically maintained sufficient working capital for our operations. Our principal source of cash in 2010 was bank borrowings and cash generated from operating activities.
Capital Expenditures
Our principal capital expenditures, which was incurred for the purchase and construction of property, plant and equipment decreased by RMB2,825.7 million, or 44.2%, from approximately RMB6,387.8 million in 2009 to approximately RMB3,562.1 million in 2010. The decrease were primarily due to a decrease of RMB1,628.2 million in the capital expenditure of Yancoal Australia for the purchases of property, plant and equipment, a decreased of RMB789.8 million the capital expenditure of Hua Ju Energy for the purchases of property, plant and equipment and a decrease of RMB390.3 million in capital expenditure of Heze Nenghua for the purchases of property, plant and equipment.
Our estimated capital expenditure for 2011 is RMB5,103.1 million. The table below sets forth our estimated capital expenditure for 2011 and capital expenditure we incurred in 2010.
Companies
Estimated capital expenditure for 2011 Capital expenditure incurred in 2010
(RMB in millions)
The Company
1,200.4 1,210.4
Shanxi Nenghua
38.1 14.5
Yancoal Australia
1,636.8 2,093.5
Yulin Nenghua
44.9 59.4
Heze Nenghua
720.5 134.8
Huaju Energy
67.7 41.6
Ordos Neng Hua
1,353.5 7.9
Haosheng Company
41.2 —
Total
5,103.1 3,562.1
We plan to finance our capital commitments primarily through a combination of funds generated from operations, bank loans and other external financing arrangements . Currently, we have sufficient cash and financing channels from commercial banks, which we expect are sufficient to satisfy the capital demand for operation and development.
2009 20F
We expect that cash from operations, which is expected to increase following our integration of the coal resources owned by Felix, and bank borrowings will be sufficient to meet our operating cash flow requirements, although certain events that materially and adversely affect our operating results may also have a negative impact on our liquidity.
We expect that cash from operations, which is expected to increase following our integration of the coal resources owned by Felix, and bank borrowings will be sufficient to meet our operating cash flow requirements, although certain events that materially and adversely affect our operating results may also have a negative impact on our liquidity.
Considering the sufficiency in our cash flow and capital sources, we believe that we will have sufficient capital to satisfy our operational and development needs.
GeoTeam Note ® : Investors may want to to note that the 2010 20F adds verbiage (that was not in 2009 20-F) stating that the company may consider external financing arrangemnts to fund growth.
