Piped-gas supplier incurs net loss of HK$221m in the first half after provision and interest expenses
Panva Gas Holdings, a mainland piped-gas supplier in which Li Ka-shing's listed flagship Hutchison Whampoa has a 4 per cent stake, reported a 40 per cent plunge in core first-half operating profit as the cost of gas purchases rose.
Profit from operations fell to HK$121 million as turnover rose 30 per cent to HK$1.24 billion.
The company slipped to a net loss of HK$221 million in the period from net profit of HK$128 million a year earlier after a provision and interest expenses arising from an interest-rate swap agreement, Panva Gas said in a press release.
Panva Gas, which operates 42 gas projects in 12 provinces, is expanding its network to take advantage of increased use of natural gas and as the government promotes consumption of cleaner-burning fuels.
At the same time, it faces higher gas purchase prices as the government seeks to bring prices closer to global levels.
The gas distributor set aside a HK$181 million provision for an interest-rate swap, a derivative instrument for Panva Gas to hedge interest expenses by swapping fixed for floating rates for its US$200 million bond and engaging a US$50 million bond in derivative instruments.
