China Energy increases Q1 profits, sales
Chinese coal producer China Energy Corp (OTCBB:CHGY) said Wednesday that first quarter profits rose 10% as volumes of coal sold increased.
For the three months ending February 28, the company produces and trades coal for domestic heating, electrical generation and coking purposes, posted net income of $4.4 million, or $0.10 per share, compared to $4.0 million, or $0.09 per share, in the year-ago period.
Revenue rose by 7.7% to $22.4 million. Sales from the company's coal group rose marginally to $16.3 million, or 73% of total sales.
Coal production was down 15% to 132,000 metric tons due to a temporary halt in production following a new requirement of the local coal bureau for mandatory safety check after the Spring Festival.
However, volume of coal sold by the company's proprietary trading business rose to 192,000 metric tons from 170,000 metric tons in the first quarter of 2010.
"We expect an incremental growth from our proprietary coal trading operation as a result of the increase in the railway space quota we were granted from the local railway bureau, which allows us to transport and sell more coal purchased from third parties," said president and CEO WenXiang Ding.
Sales from the company's heat power group, which provides heating and electric energy services to inner Mongolia, totaled $6.1 million in the first quarter, versus $4.6 million a year earlier.
First quarter gross margin was 35.7%, up from 33.7% a year before, a result of higher margins from the coal group.
At quarter-end, the company had $15.7 million in cash and equivalents.
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