Datong Coal Industry Co., China's second-largest coal producer by capacity, said first-quarter profit rose 33 percent on increased energy demand. Its shares slumped after a plan to sell stock to fund expansion was delayed.

Net income climbed to 218.3 million yuan ($31 million), or 0.26 yuan a share, from 147 million yuan, or 0.18 yuan, a year earlier, the company said in a statement to the Shanghai stock exchange today. Sales gained 61 percent to 1.86 billion yuan.

Datong Coal has benefited from a surge in demand in China, the largest producer and consumer of the fuel. The economy expanded 10.6 percent in the first three months of this year, spurring consumption of coal, used to generate almost 80 percent of the nation's power.

``The domestic contract prices of thermal coal will continue rising by a certain margin for the following years after an increase of about 10 percent in 2008,'' Datong Coal said in the statement. The company aims to boost sales by 28 percent to 6.6 billion yuan this year, it said.

Datong Coal fell by 10 percent, the daily limit, to 35.88 yuan in Shanghai trading. The company said today it will put on hold a plan to sell shares to fund the purchase of coal assets from its parent after the proposal was ``greatly affected'' by conditions in the local equity market.

The coal producer's shares had been suspended from trading since Jan. 17. China's benchmark CSI Index has dropped 30 percent since then.

Full-year profit rose 1.6 percent to 499 million yuan, or 0.6 yuan a share, from a restated 491.6 million yuan, or 0.71 yuan, a year earlier, the company said today. Sales increased 30 percent to 5.1 billion yuan.

The company said in February it will buy majority stakes in two mines for 682 million yuan to expand output and gain from record coal prices. It will purchase 80 percent in each of the mine in northern China's Inner Mongolia, it said.