Shenhuo Coal to Invest More in Aluminum in Spite of Losses

ZHENGZHOU, Mar. 26 -- Henan Shenhuo Coal & Power Co Ltd<000933>, which is principally engaged in the manufacture, processing and sale of coal and aluminum products, on Tuesday announced that it will purchase stake of more than 50% in Henan Nonferrous Metals Holding Co Ltd for RMB 347 million, even though it suffered an RMB 137-million net loss in the aluminum industry last year.

According to a statement released by the Shenzhen-listed firm, it intends to buy a 30.77% stake in the target firm from parent Henan Shenhuo Group for RMB 202 million and to buy a 22.31% stake from Henan Huiyuan Investment for RMB 145 million. Its stake will then be 98.93%.

Henan Shenhuo Coal & Power on Mar. 23 said its net profit grew 46.79% year on year to RMB 599 million in 2009 from RMB 1.13 billion in 2008.

The company suffered RMB 44.33 million in losses from investment in electrolytic aluminum futures last year.

In 2009, the firm's operating revenue plunged 10.36% year on year to RMB 10.76 billion. Its earnings per share were RMB 0.799 and a dividend of RMB 0.365 per share was paid.

In 2010, Henan Shenhuo Coal & Power aims to see RMB 16 billion in operating revenue and RMB 1.7 billion in gross profits, sources reported.