ENN targets 25pc growth in gas sales after profit falls 15.5pc

ENN Energy, one of the mainland's largest city gas distributors, posted a 15.5 per cent fall in net profit to 1.25 billion yuan (HK$1.6 billion) last year while announcing plans to raise gas sales by 25 per cent as it aims to add six to eight city gas distribution projects this year.

Excluding one-off items, such as a 784 million yuan non-cash accounting loss on its convertible bonds arising from its rising share price, underlying net profit grew 20.8 per cent to 1.94 billion yuan, it said. Gas sales jumped 25.8 per cent to 8.13 billion cubic metres, slightly higher than its target of 25 per cent.

Chief financial officer Wang Dongzhi said the company's target was for 25 per cent growth this year.

ENN plans to spend 3.5 billion yuan on capital projects, flat from last year.

The number of gas distribution projects was below the nine added last year, due to the fact that large projects were harder to come by after years of high growth, said Cheung Yip-sang, vice-chairman of the Hebei-based firm controlled by mainland entrepreneur Wang Yusuo.

"Except for western regions, about 70 per cent of the major cities on the mainland are already covered by distributors," he said. Despite this, he said only 45.6 per cent of households in ENN's projects were connected to its supply network, implying ample growth potential, compared with 80 per cent of penetration in large cities like Beijing and Chengdu.