Yanzhou Coal Mining Company Limited Annual Results 2010 … · 31-12-2010 · The Group’s coal...

1兖州煤业股份有限公司Yanzhou Coal Mining Company Limited

Yanzhou Coal Mining Company Limited

Annual Results 2010

March 2011


Part I Operation Review

Part II Major M&As

Part III Market Analysis

Part IV Operating Strategies

Part V Conclusion


Part I Operation Review

Results Overview

Financial Information

Coal Business

Operation of Major Subsidiaries


Results Overview

2010 2009Change

(%)

1. Coal business

(’000 tonnes)

Production

volume of saleable

coal

45,533 35,768 +27.30

Sales volume of

saleable coal49,634 38,017 +30.56

2. Coal chemical

business

(’000 tonnes )

Methanol

production367 199 +84.42

Methanol sales

volume376 190 +97.89

3. Net sales (RMB m) 33,944.3 20,677.1 +64.16

4. Net income (RMB m) 9,281.4 4,117.3 +125.42

5. EPS (RMB) 1.89 0.84 +125.42


Financial Information

Unit: RMB m

As at

31 December 2010

As at

31 December 2009

Change

(%)

Cash at bank and on hand 9,339.0 11,739.1 -20.45

Note receivables & accounts

receivable10,017.3 4,723.9 +112.06

Inventory 1,646.1 886.4 +85.71

Bank loan 23,015.8 22,509.8 +2.25

Total assets 72,755.9 62,432.6 +16.54

Shareholders‟ equity 37,331.9 29,151.8 +28.06

Net asset value per share

(RMB)7.59 5.93 +28.06

Interest bearing gearing ratio 31.63% 36.05% -


Unit:’000 tonnes

Production volume of saleable coal

Coal Business - Production and Sales Volumes

Unit:’000 tonnes

Sales volume of saleable coal

38,017

33,330

1,627 986 162,058

49,634

33,657

8,022

1,4981,079

5,378

Total The Headquarters

Yancoal Australia

Shanxi Neng Hua

Heze Neng Hua

Coal purchased f rom other companies

2009 2010

35,76833,130

1,605 1,00231

45,533

34,150

8,758

1,445 1,180

Total The Headquarters

Yancoal Australia

Shanxi Neng Hua

Heze Neng Hua

2009 2010


Unit: RMB/tonne

Coal Business - Coal Price

2010 2009

Y-o-Y4Q

2010

3Q

2010

2Q

2010

1Q

2010Change

Change

(%)

The Headquarters 633.59 525.27 108.32 +20.62 655.05 622.31 631.62 623.72

• Domestic 633.55 525.02 108.53 +20.67 655.05 622.07 631.68 623.72

• Export 736.44 626.24 110.20 +17.60 — 883.97 531.00 —

Shanxi Neng Hua 382.00 293.52 88.48 +30.14 440.69 367.15 352.83 373.80

Heze Neng Hua 771.99 528.48 243.51 +46.08 803.90 781.00 728.25 752.44

Yancoal Australia 774.19 737.21 36.98 +5.02 797.10 868.33 780.56 589.27


Coal Business - Cost of Coal Sold

Unit: RMB/tonne

2010 2009 Change Change

(%)

The Headquarters 258.87 260.30 -1.43 -0.55

Shanxi Neng Hua 249.59 253.79 -4.20 -1.65

Heze Neng Hua 659.68 2,309.39 -1,649.71 -71.43

Yancoal Australia 393.28 392.41 +0.97 +0.22


Operation of Major Subsidiaries

Unit: RMB m

Company Equity Interests Projects Net Income

Yancoal Australia 100%Austar Coal Mine

2,663.5Felix Resources

Shanxi Neng Hua 100%

Tianchi Coal Mine

(81.83%)-62.6

100,000 tonnes

methanol (99.89%)

Yulin Neng Hua 100%600,000 tonnes

methanol-353.4

Heze Neng Hua 98.33%Zhaolou Coal Mine

-35.5Wanfu Coal Mine

Hua Ju Energy 95.14%Electrical power and

heat businesses108.6

10

Coal Sales Contract Signed in 2011

The Group’s coal sales plan in 2011 is 54 million tonnes

The Group has signed thermal coal sales contract of 8.995 million

tonnes in Shandong Province

Contract volume (‘000 tonne) Price (RMB/tonne)

2011 2010Change

% 2011 2010

Change

%

The Headquarters 8,995 10,010 -10.1 571.29 578.26 -1.2

- National key contracts 4,290 4,290 — 503.86 503.86 —

- Provincial key contracts 3,630 3,450 +5.2 630.63 630.63 —

- Additional contracts 1,075 2,270 -52.6 640.00 640.00 —

Yancoal Australia

(1Q contract)2,660

8,020

whole

year

— 133.40

118.19

whole

year

—

兖州煤业股份有限公司Yanzhou Coal Mining Company Limited

11

Part II Major M&As

Acquisition of 51% equity interests in Haosheng Coal Mining

Company

Acquisition of Anyuan Coal Mine

Acquisition of mining rights of Zhuan Longwan Coal Mine Zone

Established JV Shaanxi Future Energy Chemical Corp. Ltd.

Acquisition of equity interests in Ashton Mining and disposal of

51% interests in Minerva Coal Mine


12

Acquisition of 51% Equity Interests in Haosheng

Acquisitor ：Yanzhou Coal

Consideration: RMB6.7 billion

Project overview：

Name of coal field Shilawusu Coal Field

Shareholding 51%

Mine type Underground Mine

Major coal type Premium thermal coal (7,000 Kcal/kg)

Resource volume 1,644 million tonnes

Planned capacity 10 million tonnes per annum


Haosheng is in the progress of mining exploration

approval application

13

Acquisition of Anyuan Coal Mine

Acquisitor: Yanzhou Coal Ordos Neng Hua Company Ltd

Consideration : RMB1.435 billion

Project overview：


Coal type Thermal coal

Resource volume 40.51 million tonnes

Extractable reserves 20.47 million tonnes

Raw coal design

capacity1.2 million tonnes per annum

Markets Shandong, Henan and Hebei, etc.

Transportation By truck


14

Acquisition of Mining Rights of Zhuan Longwan Coal Mine Zone

Acquisitor : Yanzhou Coal Ordos Neng Hua Company Ltd

Consideration : RMB 7.8 billion

Project overview:

Name of coal field Zhuanlongwan Coal Mine Zone


Major mine type Thermal coal

Resource volume 548 million tonnes



15

Established JV Shaanxi Future Energy Corp. Ltd.

1. Coal to oil project Diesel, Naphtha, LPG

2. Jinjitan Coal Mine

Resource volume 1,343 million tonnes

Extractable reserves 1,010 million tonnes

Coal type Thermal coal

Mine type Inclined shaft


Project background: To enhance profitability and realize share

reform commitment

Investment amount: RMB1.35 billion for a shareholding of 25%

Project overview:


16

Acquisition of Equity Interests in Ashton Mining and

Disposal of 51% Interests in Minerva Coal Mine

Transaction background

Other JV partners of Ashton Mining and Minerva Coal Mine

possess “Pre-emptive rights”

IMC Group and Sojitz adhered to the exercise of the above rights

Transaction details:

Agreement Consideration

Corresponding

Resource

volume

Corresponding

Extractable

reserves

Corresponding

Annual

production

capacity of

saleable coal

Coal type

Acquired 30%

interests of

Ashton Mining

USD250 million 132 million tonnes 29 million tonnes 0.9 million tonnesSemi-soft

coking coal

Disposal of 51%

interests of

Minerva Coal

Mine

AUD201

million39 million tonnes 12 million tonnes 1.4 million tonnes

Thermal

coal


17

Part III Market Analysis


Coal Market Analysis

▲ Domestic Coal Market Analysis

▲ International Coal Market Analysis

Domestic Methanol Market Analysis

18

As at 30 Dec

RMB785


Domestic Coal Market Analysis (I)

— 2010 domestic coal market overview

Supply and demand: basically in balance

(Unit: m tonne) 2010 2009 Change

Raw coal production 3,240 2,950 +9.83%

Salable coal sales 2,934 2,631 +11.52%

Net import 147 104 +41.35%

Year-end national coal

inventory206 171.5 +20.12%

Unit: m tonne

Coal price maintained at high levelShanxi Quality Mixed Coal Price in Qinhuangdao

(2010)

650

700

750

800

850

1-4 4-4 7-3 10-1 12-30

RMB per tonne


Domestic Coal Market Analysis (II)

— 2011 domestic coal market outlook

Relatively tight balance in demand and supply

Increasing coal price

Anticipation of

intensified inflation

Coal Price

Regional imbalance of

demand and supply

Stable economic

growth

Elimination of industry

players lagged behind

via market consolidation

20

Coal Price in Australia

(2010)

0.95

1.05

1.15

1.25

1.35

1-7 2-26 4-17 6-6 7-26 9-14 11-3 12-23

The Australia BJ Spot

Price of Thermal Coal

CIF of Australia Coking Coal


As at 23 Dec

USD119.18 per tonne

As at 27 Dec

USD1,730 per tonne

International Coal Market Analysis (I)

— 2010 international coal market overviewStable increase in supply and rapid rebound in demand

Increasing coal price

Million

tonnes

Major exporting countries Major importing countries

Australia IndonesiaChina

(Net import)Japan Korea India

2010 301 291 147 185 106 86

2009 273 233 104 162 93 75

YoY (%) +10.3% +24.9% +30.9% +14.2% +14.0% +14.7%

21

Japan and Australia Contracted Coking Coal Price

200.0

207.5

215.0

222.5

230.0

2Q 2010 3Q 2010 4Q 2010 1Q 2011

USD per tonne


Contracted coal price

in 1Q2011:

USD225 per tonne

International Coal Market Analysis (II)

—— 2011 international coal market outlook

Relatively tight supply and demand

Coal price may hit new height

Contracted coal price：

22

7,623

10,76411,263 11,330

15,740

8,560

11,050

12,330

16,610

20,920

4,000

8,500

13,000

17,500

22,000

2006 2007 2008 2009 2010

Production volume Consumption volume

„000 tonnes

RMB3,520 per tonne

RMB2,080 per tonne

RMB3,350 per tonne


Domestic Methanol Market Analysis (I)

—2010 domestic methanol market overview

RMB/ tonne


Domestic Methanol Market Analysis (II)

—— 2011 domestic methanol market outlook

Production capacity continues to exceed demand

Import of methanol remains at high level

Demand on a rising trend

Prudent yet optimistic outlook about methanol price


Part IV Operating Strategies

12th Five-Year Plan

Development Focus of 2011


Operating Strategies (I)

—— 12th Five-Year Plan

Objective: Achieving three-fold growth

◆ Triple production volume of coal to 150 million tonnes

◆ Triple sales income to over RMB100 billion

Implementation strategy: Two steps to complete the

Five-Year Plan

◆ To implement the plan in two phases, with the first

three years as the first phase and the latter two the

second phase

26

Adhere to the combined adoption of

production operation and capital operation


Enhance the establishment of

management system

Accelerate the development and

construction of existing projects

Strengthen existing operation

management for coal production

Operating Strategies (II)

—— Development Focus of 2011


Part V Conclusion

Achieved historic breakthrough in production volume

and results in 2010

Increasing domestic and international coal prices in

2011

Triple production volume and sales income according

to 12th Five-year Plan

Strive for delivering satisfactory results in 2011


Thank you

Yanzhou Coal Mining Company Limited Annual Results 2010 … · 31-12-2010 · The Group’s coal...

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