China National Petroleum Corporation

Earnings surprise propels CNPC

PUBLISHED : Thursday, 13 April, 2006, 12:00am
UPDATED : Thursday, 11 June, 2015, 4:57pm

Shares of CNPC (Hong Kong) shot up as much as 29.66 per cent yesterday after the oil and gas projects investor reported a greater than expected rise in net profit.

The overseas investment unit of PetroChina parent China National Petroleum Corp saw its share price close at $4.20, up 15.86 per cent from Tuesday. The stock saw a hefty turnover of $1.01 billion.

On Tuesday night, the firm posted a 374.53 per cent jump in net profit to $3.64 billion, as turnover rose 33.36 per cent to $3.37 billion.

The profit included a $1.7 billion negative goodwill from the purchase in October last year of 20 per cent of CNPC International (Caspian) from Darley Investment Services lifting its stake to 60 per cent.

CNPC (HK) paid $1.08 billion for the stake and, as the fair net asset value was appraised at $2.79 billion, the difference became the negative goodwill.

CNPC International, which owns indirect stakes in oilfields in Kazakhstan, also contributed $642 million of profit to CNPC (HK).

Excluding the negative goodwill, the company's net profit was $1.94 billion, up 152 per cent from 2004.

Analysts had expected the profit to be about $1.25 billion.

The higher profit was achieved despite sales volume declining 2.26 per cent to 279,000 barrels per day, as the drop was more than offset by a 43.94 per cent jump in the average selling price of oil at US$41.57 per barrel.

The mainland remained CNPC (HK)'s main profit contributor, with $977.02 million derived from projects in Xinjiang Autonomous Region and Liaoning province.

The company also has projects in Azerbaijan, Myanmar, Oman, Peru, and Thailand.

In December last year, it agreed to spend US$31.6 million over seven years to explore two oil and gas concession zones in Peru.

Last year's capital expenditure was $594.4 million. The company had $1.83 billion in cash on December 31 last year and gearing of 14.1 per cent.