Gas sales growth eyed by Beijing Enterprises
Distribution arm Beijing Enterprises enjoys 29.3 per cent earnings increase despite mild winter and targets growing urbanisation
Beijing Enterprises Holdings, the Hong Kong-listed natural gas distribution arm of the Beijing municipal government, said it is targeting faster gas sales growth this year, after posting a better-than-expected 29.3 per cent profit growth for last year.
Net profit was HK$4.18 bil- lion last year, from HK$3.23 billion in 2012 and higher than the HK$3.74 billion average estimate of 21 analysts polled by Thomson Reuters. Revenue grew 19.1 per cent to HK$42.36 billion.
Some 80 per cent of the profit, or HK$3.52 billion, came from piped-gas distribution.
Urbanisation and curbs on air pollution [mean] gas sales will continue to grow
Of the amount, HK$1.32 billion was from gas sales within the capital city, and HK$2.22 billion from a 40 per cent-owned joint venture with PetroChina - the nation's largest oil and gas producer - that operates a pipeline transporting gas from fields in northern China to Beijing.
Net profit from gas sales in Beijing was 24.9 per cent higher than in 2012, thanks partly to a 9.8 per cent growth in sales volume to 8.72 billion cubic metres (bcm).
Chief executive Zhou Si, head of the firm's gas business, said last year's sales volume growth was below expectation because Beijing's last winter was one of the warmest on record in past decades.
"But with ongoing urbanisation and curbs on air pollution, gas sales will continue to grow," he said, adding this year's sales are targeted to grow 14.7 per cent to 10 bcm.
The biggest growth driver is power plants, since the municipality aims to be rid of all coal-fired boilers in six of its districts by 2016 and replace them with cleaner gas-fired units, Zhou said.
Vehicular gas distribution is also a future growth driver, he said.
The municipality government plans to raise the number of compressed natural gas refilling stations to 197 from 32 and that of liquefied natural gas to 261 from 18 by the end of 2020.
Net profit from the pipeline joint venture with PetroChina grew 29.3 per cent to HK$2.22 billion, mainly driven by a lengthening of its assets' useable life from 14 years to 30 years, which cut depreciation expenses.
The venture operates three parallel pipelines whose combined throughput grew 6.3 per cent last year to 25.2 bcm. It is building a fourth line with an annual capacity of 15 bcm. The four lines' combined capacity amounts to 50 bcm.
Despite state-owned Citic Group's plan to inject essentially all its assets into its Hong Kong unit Citic Pacific, in a potential deal seen to be part of a deepening of state-enterprise reform, Zhou said that Beijing Enterprises' parent Beijing Enterprises Group has no plans to inject all of its assets into its Hong Kong units.
