Revenue Falls 13.2% on Weaker Coal Market
China Shenhua, the country's largest listed coal company, reported a 13.2% year-over-year decline in revenue to 294.92 billion RMB for fiscal year 2025. Net profit attributable to shareholders fell 5.3% to 52.85 billion RMB. The performance was directly impacted by a shifting supply-demand balance and a downturn in coal prices, which also led to a 6.4% decrease in coal sales volume to 430.9 million tons.
The pressure on earnings is not unique to Shenhua, reflecting a broader trend across China's major energy producers. State-owned peer PetroChina also reported a 4.5% drop in its 2025 net profit, attributing the decline to lower global oil prices. This sector-wide headwind underscores the challenging commodity price environment faced by the region's largest energy firms.
Shareholder Payout Ratio Lifted to 79.1%
In a significant move to bolster investor confidence, China Shenhua's board announced plans to increase shareholder returns. The company will distribute a total of 41.81 billion RMB in dividends for 2025, representing a cash payout ratio of 79.1% of net profit. This marks a notable increase from the 76.5% ratio in 2024 and 75.2% in 2023, establishing a clear trend of prioritizing shareholder distributions even as profits moderate.
The total proposed dividend for 2025 amounts to approximately 2.01 RMB per share. This commitment to a high and rising payout provides a substantial yield, positioning the company as an attractive option for income-focused investors and signaling management's confidence in its long-term cash flow generation.
Asset-Liability Ratio Improves to 23.3%
Despite the revenue downturn, China Shenhua demonstrated underlying operational and financial strength. The company's integrated model, which includes power generation and railway transport, provided a crucial buffer against coal price volatility. This was evident in the modest 2.8% decline in EBITDA to 100.47 billion RMB, indicating effective cost management that partially offset price pressures.
The company's balance sheet also strengthened during the year. The asset-liability ratio improved, falling to 23.3% at the end of 2025 from 25.7% a year prior. Similarly, the total debt-to-capital ratio decreased from 9.0% to 6.8%. This robust financial position underpins the company's ability to sustain its generous dividend policy and navigate continued market uncertainty.
