Hong Kong and China Gas (Towngas) expects slower gas sales growth on the mainland as upstream supply hits a bottleneck this year, managing director Alfred Chan Wing-kin said. Mr Chan yesterday forecast the utility's mainland gas sales growth would slow to 20 per cent from last year's 26 per cent, as supply from oil producer PetroChina's east-west gas transmission pipeline had already peaked while a second transmission pipeline would be commissioned next year. The utility's 86 projects in 18 mainland provinces spanning gas, water supply and waste water treatment sectors were a star performer last year. Its operating profit from the mainland operation grew 51 per cent to HK$980 million, Mr Chan said. This growth surpassed the utility's bread and butter, the core piped-naphtha gas supply in Hong Kong, whose operating profit rose 2 per cent to HK$2.7 billion. The group's profit attributable to shareholders was 53.58 per cent lower at HK$4.3 billion, or 64.5 HK cents per share as revenue dropped 31.15 per cent to HK$12.35 billion. The weaker profit reflected a smaller non-recurring gain of HK$1.29 billion last year, as 2007 results were inflated by a one-off HK$6.28 billion profit from the firm's acquisition of a stake in the former Panva Gas Holdings (now Towngas China) and a property revaluation surplus from the International Finance Centre complex in Central. The group's net profit exceeded analysts' consensus forecast of HK$3.78 billion. Its operating profit, at HK$3 billion, came after analysts estimated a HK$680 million write-down on securities investments, a figure Mr Chan declined to comment on. 'Mainland projects have entered a harvesting stage,' he said. 'However, the bottleneck of upstream gas supply will slow our gas sales across the border.' To cement the utility's position as the country's largest gas supplier, Mr Chan said the group earmarked HK$3.6 billion for buying piped-gas projects and new energy sources such as coalbed methane this year. The final dividend was unchanged at 23 HK cents per share, keeping the full-year payout the same at 35 HK cents per share. Shares in Towngas sank 28 HK cents, closing 2.37 per cent lower to HK$11.50 before the results were announced yesterday.