Panva Gas posts loss amid fall in new customers
Panva Gas Holdings, a Hong Kong and China Gas (Towngas) associate, plunged to a net loss of HK$256.33 million last year from a net profit of HK$155.77 million a year earlier because of a sharp drop in new customers and provisions for interest rate swaps.
Gross profit fell 41.3 per cent to HK$404.7 million before a HK$124.15 million exceptional loss in two interest rate swaps.
Turnover climbed 13.7 per cent to HK$2.64 billion, helped by a 144.5 per cent jump in sales of piped gas and a 30 per cent rise distributing liquefied petroleum gas.
The group's key earner, a one-time connection fee charged to customers for subscribing to piped-gas services, saw sales slip 53.5 per cent to HK$331.2 million as the company added 115,000 customers, a decline of 42 per cent.
Panva said the interest rate swaps with a combined valued of US$55.95 million were terminated in September last year.
The swaps were a key reason for the 53.58 per cent jump in the firm's finance expenses to HK$178.42 million last year.
While planning to rename Panva as 'Towngas China,' Towngas was helping the associate arrange lowest cost funding to buy piped-gas projects on the mainland, Towngas managing director Alfred Chan Wing-kin said last month. He conceded that Panva's expansion was limited by insufficient funding.
Towngas, which sold 10 mainland piped-gas projects to Panva in exchange for a controlling 43.97 per cent stake in the company worth HK$3.23 billion in December, was not exposed to Panva's results as the deal was completed in February.
However, Panva's loss brought its former controlling shareholder, Enerchina Holdings, into the red, with a net loss of HK$79.62 million last year against a HK$190.95 million net profit in 2005. Enerchina's stake in Panva was diluted to 30.53 per cent from 57.94 per cent as a result of the Towngas deal.
Enerchina executive director Francis Tang Yui-man said the group would continue to hold its stake in Panva.
Panva shares added 1.68 per cent to HK$4.24, but Enerchina shares dipped 1.75 per cent to 56 HK cents yesterday. Towngas closed 1.18 per cent lower at HK$18.44.