ENN Energy, which has made a hostile bid with Sinopec for rival China Gas Holdings, yesterday reported that its net profit last year increased over 23 per cent.
Announcing its annual results, the company said net profit rose 23.7 per cent to 1.01 billion yuan (HK$1.24 billion). A steep increase in sales costs, which went up more than a third to 11.2 billion yuan, was offset by a robust increase in gross profit. Earnings per shared increased by 22.7 per cent to 1.19 yuan.
'With the existing, supportive policies of the Chinese government, natural gas will gradually become the major fuel in the urban gas market, presenting considerable potential for the sustainable development of urban gas projects and bright market prospects,' it said.
'We will seize this opportunity and ensure that while we develop the existing business [in an] orderly [manner], we will focus more on the development of natural gas-distributed energy projects and vehicle/ship LNG business.'
As at the end of last year, the company's total debt went up to 10.7 billion yuan from 6.3 billion yuan, pushing up its net gearing ratio from 45.3 per cent to 54.3 per cent.
It issued 10-year bonds in May to raise US$750 million, after completing a redemption of another tranche of seven-year bonds totalling US$200 million.
ENN Energy is pursuing a HK$15.3 billion consortium bid with Sinopec to take over China Gas Holdings at HK$3.50 per share. China Gas closed at HK$3.79 per share, up 0.5 per cent, yesterday
Sinopec and ENN Energy have extended the deadline for completing negotiations over the bid from the end of this month to May 15.
Sinopec's fourth-quarter profit dropped 23 per cent to 11.8 billion yuan as a result of increased production costs, dragging down its 2011 net income growth to just 2 per cent.