Kunlun Energy net profit swoons 98 per cent in 2015
Falling crude oil prices and foreign exchange weakness weighed on the annual result
Kunlun Energy, the natural gas distribution and overseas oil production unit of PetroChina, reported on Friday a sharper than expected 97.6 per cent drop in profit for 2015, helping to send its shares down by more than 2.2 per cent.
Net profit amounted to HK$137 million for 2015, down from HK$5.61 billion yuan in 2014, the firm said in a filing to the Hong Kong stock exchange.
The result was much lower than the 3.68 billion yuan (HK$4.41 billion) average estimate of 15 analysts polled by Thomson Reuters.
“Due to the significant decline of the international price of crude oil, the impairment in relation to the oil and gas properties, and the reform on exchange rate system in Kazakhstan, the exploration and production business incurred a loss which has dragged down the overall performance,” chairman Huang Weihe said.
Kunlun booked a net loss of HK$2.91 billion from oil and gas exploration and production, compared to a profit of HK$1.55 billion in 2014, as its average oil selling price halved to US$43 a barrel from 2014.
It was also hit by HK$1.72 billion of asset impairment loss from its oil assets, and a foreign exchange loss from the sharp depreciation of the Kazakhstani tenge. Kunlun has major oil field assets in the Central Asian nation of Kazakhstan.