Beer, gas drive 93.7pc jump in Beijing Enterprises profit
Beijing Enterprises Holdings, the investment arm of the capital's city government, expects its gas and beer businesses to maintain their robust growth after reporting a 93.7 per cent jump in first-half earnings.
'Our gas sales volume in Beijing grew at a rate of more than 20 per cent in past years and [we expect] such a trend will continue,' said vice-chairman Zhou Si.
Beijing Gas, the piped-gas unit the group bought from its state-owned parent for HK$1.16 billion last year, contributed HK$847 million in after-tax profit in the first six months, making up 66.5 per cent of total earnings.
The capital's only piped-gas distributor sold 25 per cent more gas to 2.49 billion cubic metres.
Mr Zhou, also the chairman of Beijing Gas, said the firm expected gas consumption in Beijing to reach 6 billion cubic metres by 2010 and 12 billion cubic metres by 2020 from 3.7 billion cubic metres last year.
Huayou, Beijing Enterprises' 40 per cent-owned joint venture with the mainland's largest oil and gas producer, PetroChina, supplied 5.85 billion cubic metres of gas through the Shaanxi-Beijing natural gas pipeline in the first half. Part of the volume was sold to other cities.
Beijing Gas, which will expand into gas resources business and extend piped-gas services to the Bohai Circle region, was in talks with PetroChina on a possible co-operation in piped-gas services, Mr Zhou said, without giving any details.
The gas distributor was also looking at expanding its coal-to-gas and other coal-related businesses after paying 1.86 billion yuan (HK$2.12 billion) for 33 per cent of Inner Mongolia Datang International Keqi Coal-based Gas earlier this year.
It had also signed a letter of intent with Shanxi Energy Industries Group to co-operate in a coal-bed methane business, Mr Zhou said.
Beijing Enterprises, whose businesses range from gas to toll roads, water treatment and beer, said first-half profit rose to HK$1.27 billion from HK$657 million a year earlier because of the contribution from the newly acquired natural gas business.
Revenue soared 157.9 per cent to HK$9.47 billion. The interim dividend was 20 HK cents per share.
The beer unit, Shanghai-listed Yanjing Brewery, sold 2.06 million kilolitres of beer, up 6.2 per cent, and contributed HK$123 million, up 39.6 per cent, to group after-tax profit.
Yanjing Brewery chairman Li Fucheng said the company was confident of completing the planned 1.8billion yuan A-share placement this year despite the sluggish stock market.
He said the mainland's beer market still had plenty of room to grow because of the low consumption rate compared with developed countries.
He expected Yanjing Brewery to continue to deliver strong earnings growth through capacity expansion.
Analysts said the gas unit would continue to be the main earnings driver at Beijing Enterprises given its stable income flow and bigger base compared with the group's other business units.