China Shenhua's revenue in the first half of the year was 138.1 billion yuan, with effective cost control leading to a significant year-on-year decrease of 7.7% in self-produced coal costs | Financial Report Insights
China Shenhua's net profit in the first half of the year decreased by 12.0% year-on-year, and the company attributed the decline in performance to the "severe situation of falling coal electricity prices." The company's commodity coal production, coal sales volume, and power generation completed 49.4%, 44.0%, and 43.5% of the annual targets, respectively, while operating revenue achieved 43.2% of the annual target, with progress basically in line with expectations. The company plans to distribute cash dividends of no less than 65% of the annual net profit attributable to shareholders in the next three years and is considering implementing mid-term dividends
China's energy giant China Shenhua reported a decline in both revenue and profit in the first half of the year, attributing the performance drop to the "severe situation of falling coal electricity prices." By the end of the first half, the company's commercial coal production, coal sales, and electricity generation completed 49.4%, 44.0%, and 43.5% of their annual targets, respectively, while operating revenue reached 43.2% of the annual target, which is basically in line with expectations.
On the 29th, China Shenhua released its financial report for the first half of 2025:
- Operating revenue of 138.109 billion yuan, a year-on-year decrease of 18.3%.
- Net profit of 24.641 billion yuan, a year-on-year decrease of 12.0%.
- Net cash flow from operating activities was 45.794 billion yuan, a year-on-year decrease of 11.7%.
- Basic earnings per share fell from 1.410 yuan in the same period last year to 1.240 yuan.
Core Business Progress:
- Commercial coal production of 165.4 million tons, completing 49.4% of the annual target; coal sales of 204.9 million tons, completing 44.0%
- Electricity generation of 98.78 billion kWh, completing 43.5% of the annual target; all segments achieved year-on-year growth in gross profit margin
- The unit production cost of self-produced coal decreased by 7.7% year-on-year, exceeding expectations in cost control
Performance Under Pressure, Cost Control Effective
The financial report data shows that China Shenhua faced significant operational pressure in the first half of 2025. In addition to double-digit declines in revenue and net profit, the net cash flow from operating activities was 45.794 billion yuan, a year-on-year decrease of 11.7%, and basic earnings per share also fell from 1.410 yuan in the same period last year to 1.240 yuan.
However, the report also disclosed several positive operational signals. The company pointed out that by tapping into internal potential, the gross profit margins of all business segments achieved year-on-year growth. Crucially, the unit production cost of self-produced coal significantly decreased by 7.7% year-on-year, compared to the "approximately 6% increase" set at the beginning of the year, indicating that the company achieved unexpected results in cost control.
By the end of the first half, the company's commercial coal production, coal sales, and electricity generation completed 49.4%, 44.0%, and 43.5% of their annual targets, respectively, with operating revenue completing 43.2% of the annual target, which is basically in line with expectations.
The report stated that the company has initiated the acquisition of coal, pithead coal power, and coal-to-oil chemical assets held by its controlling shareholder, the National Energy Group, aiming to further reduce related transactions and promote the aggregation of quality resources to the listed company. Previously, the company completed the acquisition of 100% equity of Hangjin Energy in February 2025.
Cash Dividends and Market Value Management
The company not only proposed a high interim dividend plan but also established a clear long-term return plan. The cash dividend amount for the next three years will not be less than 65% of the net profit attributable to the parent company for that year, and consideration will be given to implementing interim dividends. This policy provides investors with a stable and predictable return outlook. Previously, the company had distributed a final dividend of 2.26 yuan per share for the year 2024, with a dividend payout ratio as high as 76.5% In addition, the company is systematically promoting its market value management work. The board of directors has reviewed and approved the "Market Value Management System" and formulated a specific annual implementation plan. During the reporting period, the company actively communicated with the market through various forms such as performance briefings, investor visits, and broker communication meetings, engaging with approximately 1,800 investors in total during the first half of the year
