CHINA Shenhua Energy Co., the biggest coal miner in the world’s largest producer, yesterday surged the most since 2008 after rewarding investors with a special dividend as it posted its first profit growth in four years.

    Net income rose 41 percent to 24.9 billion yuan (US$3.6 billion) last year, the Beijing-based company said late Friday. Shenhua, which also owns power plants and railroads, flagged the profit increase in January. Revenue expanded 3.4 percent to 183 billion yuan, with about half from coal and more than one-third from power.

    The firm proposed a final dividend of 0.46 yuan per share for 2016, as well as a special dividend of 2.51 yuan per share, it said in a statement. Shenhua’s Shanghai-listed shares jumped 10 percent to 18.36 yuan yesterday.

    Coal prices in China surged last year, snapping four years of declines, after the government ordered miners to reduce output as part of its effort to revitalize the industry and curb industrial overcapacity. That helped bump up the nation’s benchmark power station coal prices more than 70 percent, even as the measures were relaxed near the end of the year.

    “The scale of the special payout is startling and could be a bellwether for China’s State-owned enterprises,” Laban Yu, head of Asia oil and gas equity research at Jefferies Group LLC in Hong Kong, wrote in a note yesterday. “We believe initial market reaction will be overwhelmingly positive, although this does signal a lack of investment opportunity in China’s coal industry.”

    Shenhua’s coal sales last year rose 6.6 percent to 394.9 million tons, almost entirely thermal coal, and commercial output advanced 3.2 percent to 289.8 million tons, with about two thirds of that produced in Inner Mongolia, the firm said in its Friday statement. That compares with a 9.4 percent drop in China’s total output because of the government limits.

    The firm sold coal at an average price of 317 yuan a ton in 2016, up 8.2 percent year on year, according to its statement. It also said it booked 2.8 billion yuan in impairment charges, mainly on electricity generation assets.

    The National Development and Reform Commission, the nation’s top planner, said this month it doesn’t intend to introduce output restrictions this year as long as prices stay in or above a range considered acceptable. Miners may keep a lid on production to sustain higher prices, analysts with North Square Blue Oak Ltd. and Argonaut Securities (Asia) Ltd. forecast. (SD-Agencies)