Citic has HK$10b to buy oil and coal resources
Armed with HK$10.78 billion in cash, Citic Resources Holdings is seeking to acquire coal and oil resources in China and other countries.
'Expansion from new investment opportunities is on the agenda,' said Zeng Chen, the vice-chairman and CEO of the Hong Kong-listed firm. 'I would like to do a multibillion dollar deal in the next 12 months. We like to grow this company. Now we have HK$10 billion in cash. If we have acquisition opportunities, this will enable acquisitions.
'Our focus will be coal and oil. If there is a good coal opportunity, we won't pass it by. We will focus on Kazakhstan, Australia, China, Indonesia and Africa,' Zeng said.
In addition, Citic Resources executive director Rosanna Li So-mui said the Chinese state-owned resources company planned a capacity expenditure of more than HK$2 billion for this year, most of which would be spent on developing its Yuedong oilfield in Liaoning province.
Production started in Yuedong last year, and facilities on platform B will begin operation this year. Yuedong will reach full production capacity in 2015.
Citic would further increase oil production in its Karazhanbas oilfield in Kazakhstan, which was its largest oil-production facility, Zeng said.
Karazhanbas accounted for 6.62 million barrels of the 7.28 million barrels of oil produced by Citic Resources last year. The company has a third oil-production facility in Seram Island, Indonesia.
The firm's cash on hand increased to HK$10.78 billion at the end of last year from HK$2.32 billion at the end of 2010, largely due to its pre-tax gain of HK$3.7 billion from the sale of Citic Resources' entire 16.34 per cent stake in Macarthur Coal, an Australian company.
The net profit of Citic Resources doubled to HK$2.2 billion last year. Excluding the gain from the sale of the stake in Macarthur Coal and asset impairment losses, Citic Resources' earnings before interest and tax (ebit) rose 54.8 per cent to HK$2.14 billion last year. Turnover increased 28.1 per cent to HK$38.5 billion in 2011.
Despite the 100 per cent rise in net profit, Citic Resources' share price fell 6.3 per cent to HK$1.33 yesterday.
Citic Resources' net debt at the end of last year, in Hong Kong dollars. The figure for the end of 2010 was HK$10 billion