Towngas expects mainland profits to match HK
Utility Hong Kong and China Gas (Towngas) expects profits from its mainland portfolio to match those from its Hong Kong home market next year after delivering a forecast-beating performance last year.
Net profit in 2010 rose 5.87 per cent to HK$5.58 billion, or 77.8 HK cents per share from 2009, beating analysts' consensus prediction of HK$4.7 billion.
Powering the growth was the mainland portfolio, which runs 120 projects in gas, water and new energy sources in 20 provinces and which saw earnings before interest, taxation, depreciation and appreciation (ebitda) double to HK$2.13 billion last year from HK$1.04 billion in 2009.
Towngas chairman Lee Shau-kee said yesterday the group's new energy sources and city piped-gas projects on the mainland would 'have faster growth momentum than the Hong Kong gas business'.
The mainland portfolio accounted for about a third of the group's ebitda of HK$6.45 billion. Towngas is the mainland's largest gas business, selling 8.54 billion cubic metres of gas to 11.88 million customers.
Towngas is the dominant player in piped-naphtha gas supply in Hong Kong, and saw its ebitda in the city rise 6.94 per cent to HK$4.19 billion last year. It supplied 1.72 million households, up 1.5 per cent.
Gas revenue in the city soared 34.71 per cent to HK$10.55 billion, owing partly to a 2.8 per cent increase in tariff last year.
Revenue from the mainland more than doubled to HK$8.56 billion from HK$3.94 billion in 2009, driven by drinking water supply and sewage treatment projects and gas consumption at 93 city piped-gas projects.
The final dividend was the same at 23 HK cents per share, keeping the full-year total unchanged at 35 HK cents per share.
A bonus share is proposed for every 10 shares held by existing shareholders. Towngas shares dropped 44 HK cents, or 2.44 per cent, to HK$17.56 before the results were released yesterday.