China Shenhua Energy Company (1088) Q2 2006 earnings summary

Executive summary

• Revenues for the first half of 2006 reached RMB29,533 million, up 20.5% year-over-year, with profit attributable to equity shareholders at RMB8,614 million, up 10.4% year-over-year.

• Coal sales volume increased 18.5% to 80.8 million tonnes, and commercial coal production rose 10.9% to 66.9 million tonnes compared to the same period last year.

• Power segment gross generation increased 26.9% to 23.10 billion kwh, with installed capacity up 50.3% to 8,960 MW.

Financial highlights

• Operating revenues rose by RMB5,019 million (20.5%) year-over-year, driven by higher coal sales and increased power output.

• Profit from operations reached RMB13,171 million, up 12.2% year-over-year.

• Net cash from operating activities was RMB11,692 million, down 24.0% year-over-year due to higher receivables and tax payments.

• Basic earnings per share was RMB0.476 for the period.

Outlook and guidance

• The company targets an additional 15 million tonnes of commercial coal production in the second half of 2006.

• Plans include upgrades to key mines, expansion of railway and port capacity, and commissioning of new power generation units.

• Coal prices expected to remain high but with slight fluctuations; power supply and demand to become more balanced.