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SCMP Reporter

HONG Kong and China Gas Co saw net profit rise slightly ahead of market expectations by 21.3 per cent to $1.13 billion, in figures boosted by special tax arrangements including some possibly linked to aircraft leasing last year.

   For the year to December 31, the group announced bonus issues of one-for-five shares and one-for-10 warrants to shareholders.

  It also reported an increase in authorised share capital and a $4 billion credit on the revaluation of property.

   Chairman Lee Shau-kee said the group would increase its consumer base in Hong Kong and look for ventures in China, with one project in Panyu, Guangdong province, already being worked on.

  Earnings per share were 71 cents, up 20.3 per cent, and the final dividend was 23 cents a share, up one cent, taking the total for the year to 35 cents, up one cent.

  The company plans to increase its authorised capital by $250 million to $750 million by creating one billion 25-cent ordinary shares.

  A revaluation by Chesterton Petty of group property has led to an unrealised property revaluation surplus of $4.42 billion, which has been credited in the company's accounts.

  Mr Lee forecast a rise of 70,000 customers by the end of the year and sales would increase by eight per cent.

  The company has already agreed a tariff rise of six per cent.

  In China, the company is exploring production and distribution investment deals.

  In Panyu, a US$27 million venture with Panyu Gas Co is still at the feasibility stage.

  Construction of the planned Lantau gas link is due to start in the middle of this year once the new project for the airport is fully funded.

  The property revaluation involved sites in Ma Tau Kok, Tai Po Industrial Estate and North Point.

  The value of the latter two sites was based on the replacement cost of the land only and did not include the value of the buildings and equipment installed.

  Mr Lee said the 12,100-square metre site was ready for redevelopment and the old gas-making facilities had been cleared following the commissioning of the second phase expansion of the Tai Po gas plant.

  Contracts for foundation works are to be awarded by the end of next month. Mr Lee said that, with no restriction on use, Towngas would ''use the site to construct a high-quality building for rental purposes''.

  It will be available for occupancy in 1997.

  The company's new building in Java Road, North Point, was completed late last year and most of its operations will be centred there during the summer.

  Group turnover rose 10.1 per cent to $3.26 billion.

   Operating profit, before tax, was $1.19 billion, up 12 per cent.

   Operating profit margin was 36.64 per cent at the end of the period, compared with 36.02 per cent in 1992.

  The tax bill was $59 million, compared with $130.4 million in the previous year.

  The company said the calculation of the provision was based on the standard corporate tax rate of 17.5 per cent on assessable earnings.

  It also accounted for losses arising from investments in aircraft owning and leasing limited partnerships, the amortisation of these investments, and the net deferred tax movements.

  Had there not been any treatment to the tax provision the tax bill might have been $198.73 million.

  This might have left profit after tax at $995.87 million, up 6.38 per cent.

    According to the Estimate Directory, analysts had expected the company's net profits to rise 19 per cent to $1.11 billion.



Towngas gives warrants and shares after 21.3pc profit jump