The company cited falling coal prices as the reason for the loss.
Net profit went down nearly 10% to 10.4 billion Yuan ($A1.8 billion) in the first three months of the year, according to a report released by the Shenzhen Stock Exchange.
During the January-March period, Shenhua's revenue dipped 0.1% year-on-year to 60.9 billion Yuan.
The Beijing-based producer attributed the poor performance largely to rising production costs and falling coal prices.
The cost of producing each tonne of coal increased 4.6% YOY to 127.8 Yuan.
The Bohai-Rim Steam-Coal Price Index, a major indicator of coal prices in China, plummeted from 631 Yuan ($A108) per tonne at the end of 2013 to 530 Yuan at the end of March, down 16%.
In addition to weak demand, the company also blamed growing coal imports, which rose 5.1% to 84 million tonnes in the first quarter.
The company painted a bleak picture for china’s coal industry for the second quarter of this year, due to weak demand and the government’s push to restructure the energy portfolio to increase the use of cleaner fuels.
Shenhua says it expects the coal market to regain balance as the government accelerates steps to reduce overcapacity in coal production and the price advantage of imported coal weakens, as predicted.
