• Mon
  • Jul 14, 2014
  • Updated: 3:16am

Beijing Enterprises lifts core earnings 73.5pc

PUBLISHED : Wednesday, 09 April, 2008, 12:00am
UPDATED : Wednesday, 09 April, 2008, 12:00am

Beijing Enterprises Holdings, the investment arm of the city government, reported a 73.5 per cent jump in underlying profit to HK$1.034 billion for last year after it expanded its piped-gas business.

Including one-off exceptional gains arising from the disposal of some stakes in a number of units and a property revaluation gain, net profit rose 325 per cent to a better than expected HK$1.44 billion. That was a record high since the company went public in 1997. Sales rose 56 per cent to HK$11.3 billion.

The company declared a final dividend of 30 HK cents and a special dividend of 10 HK cents a share.

Vice-chairman and chief executive Zhang Honghai said the company would continue to increase investment in the piped-gas business, which it expected to be a major earnings growth driver.

Its piped-gas unit, Beijing Gas, which the red-chip company acquired from its state-owned parent Beijing Enterprises Group for HK$1.16 billion, contributed HK$161 million profit in the second half of last year.

The piped-gas distributor sold 3.7 billion cubic metres of gas last year and is targeting to sell 4.5 billion cubic metres this year.

Beijing Enterprises has set aside between HK$3 billion and HK$4 billion for capital spending this year. Of the amount, HK$2 billion will be earmarked for the gas business.

Mr Zhang said Beijing Gas, which will expand into upstream gas resources and extend its piped-gas services to the Bohai Circle Region, would pay 1.86 billion yuan (HK$2.07 billion) for a 33 per cent stake in Inner Mongolia Datang International Keqi Coal-based Gas.

The project, which involves an investment of 18.78 billion yuan, will use coal to produce natural gas with a planned annual output of 4 billion cubic metres a year.

Beijing Gas has also agreed to pay about 300 million yuan for a 60 per cent stake in piped-gas distributor of Shandong-based Zhongyuan Gas.

Meanwhile, Beijing Enterprises will set aside HK$600 million to HK$800 million for its water treatment business - mainly for the acquisition of Hong Kong-listed Shang Hua Holdings which it announced in January.

Mr Zhang said Shang Hua, to be renamed Beijing Enterprises Water Group, would be a platform for investment in water-related projects.

Although Beijing Enterprises could not inject its existing water treatment plants to Shang Hua over the next two years based on the listing rules, the group's water supply business would be restructured, Mr Zhang said, without elaborating.

Its water business contributed HK$154 million in last year's profit, up 7 per cent.

Record profit

The company posted a net profit of HK$1.44 billion, a jump of: 325%

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