ENN targets 20 per cent growth in net profit

Energy firm also aims to lift revenue and increase capital expenditure

PUBLISHED : Thursday, 28 March, 2013, 12:00am
UPDATED : Thursday, 28 March, 2013, 6:31am


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Piped-gas distributor ENN Energy aims to grow net profit by a fifth this year, mostly by raising gas sales volume.

Chief financial officer Wang Dongzhi said yesterday that the Langfang, Hebei-based firm sought to lift both revenue and net profit by 20 per cent this year, after it posted an 18.3 per cent net profit rise to 1.48 billion yuan (HK$1.83 billion) for last year.

The profit was 3.6 per cent less than the average estimate of 21 analysts polled by Thomson Reuters, but according to Daiwa Securities head of utilities Dave Dai, its underlying profit grew 24 per cent if one-off items were excluded. Those items included 120 million yuan of lost interest income on cash it kept at a bank to obtain financing for a stake acquisition in rival China Gas, which did not materialise, Dai said.

Revenue grew 19.6 per cent to 18.03 billion yuan, on the back of a 24.2 per cent rise in natural gas sales to 6.22 billion cubic metres (bcm). Including coal gas sales, total gas sales grew 20.2 per cent to 6.46 bcm.

Gas sales accounted for 76.8 per cent of ENN's revenues last year. Some 20.2 per cent of revenues came from fees it charged customers to connect them to its pipeline network.

Despite Beijing's plan to raise domestic gas prices to bring them in line with international levels in the long term, ENN chief executive Cheung Yip-sang said he had not heard of the timing or degree of any price hike.

"Ultimately, we will share the burden with our customers, but we have made preparations to help reduce the impact on our customers and maintain our sales," he said.

Wang said ENN set this year's capital expenditure at a slightly higher level than last year's 3.15 billion yuan. It will mostly fund gas pipeline, processing and storage infrastructure, as well as the construction of compressed natural gas (CNG) and liquefied natural gas (LNG) refuelling stations for vehicles.

ENN plans to add 30 to 40 CNG stations this year after building 25 last year, and add more than 100 LNG stations after adding 67 last year. It had 244 CNG stations and 86 LNG stations at the end of last year. CNG stations mainly serve taxis while LNG stations mainly refuel trucks and vessels.