Towngas' 'mainland revenue to overtake HK'
Hong Kong and China Gas, commonly known as Towngas, says its mainland gas and clean-energy businesses are growing so fast that their combined profits will overtake that of its core gas operations on its Hong Kong home turf next year.
Chairman Lee Shau-kee made this prediction yesterday after the utility reported a 16 per cent jump in net profit, excluding one-off items, to HK$3.22 billion in the first six months of this year.
Including a surplus in the revaluation of investment properties and a profit from selling properties, net profit grew 6.73 per cent compared with the account of the same period last year, which was restated.
Earnings before interest, taxation, depreciation and amortisation of gas, water and energy supply services on the mainland soared 27.18 per cent to HK$1.31 billion in the first half, while that of core naphtha piped-gas supply in Hong Kong climbed 0.83 per cent to HK$2.42 billion.
Towngas has amassed a portfolio of 127 projects spanning upstream, mid-stream and downstream natural gas supply, sewage treatment and new energy sources in 21 provinces and regions across the mainland.
Lee said the utility sought to capitalise on the central government's five-year plan to 2015 to double natural gas consumption.
The company claims to be the largest piped-gas enterprise on the mainland in terms of sales, which leapt 21.49 per cent to 5.2 billion cubic metres in the first-half.
In Hong Kong, Towngas sold 2.84 per cent more gas, at 15.53 million megajoules, which analysts considered 'good growth' in the matured market. Lee attributed the growth to prosperous tourism and hospitality sectors and cooler temperatures in the first half.
The utility's customers on the mainland grew 10.61 per cent to 12.40 million, well above that of Hong Kong, which saw customers increase 1.16 per cent to 1.73 million.
Part of the firm's growth came from Towngas China, a piped-gas service provider on the mainland of which Towngas owns 66.18 per cent. Towngas China reported a 75.9 per cent rise in net profit to HK$302 million in the first half on a 58.1 per cent gain in turnover to HK$1.96 billion.
Lee said Towngas China would pursue purchasing more city piped-gas projects in order to boost growth
Towngas shares slipped 4 HK cents to HK$17.92 yesterday before the results were made public. Towngas China jumped 11 HK cents, or 2.7 per cent to HK$4.18 yesterday.
China's energy consumption in 2010, in billion metric tons of coal equivalent, an increase of 5.9 per cent on the previous year