PetroChina’s Kunlun Energy unit posts better than expected 4pc increase in profit in first half

Kunlun Energy, the natural gas distribution unit of oil and gas giant PetroChina, posted a better than expected interim profit increase, which was boosted by inclusion of the newly acquired city gas distribution unit Kunlun Gas from its parent.

Net profit for the year’s first-half amounted to HK$2.89 billion, up 4 per cent year-on-year. The year-earlier period profit was restated from HK$1.92 billion to HK$2.78 billion to include the effect of the acquisition that was completed in June this year, to enable a meaningful year-on-year comparison.

Net profit was 8.3 per cent higher than the HK$2.67 billion estimate by analysts at Sanford Bernstein.

No interim dividend was declared, consistent with the firm’s practise in previous years.

“In the second half of the year, the situation of oversupply in the international oil and gas market would continue, the growth of domestic demand for natural gas would slow down, and the market competition would further intensify,” Kunlun Energy said in a filing to Hong Kong’s exchange on Friday morning. “The group will actively respond to these challenges.”

First-half net loss from the oil and gas production segment widened to HK$223 million, from a loss of HK$133 million in the year-earlier period, as low oil prices continued to trouble its mostly overseas production assets.

Natural gas marketing and liquefied natural gas processing net profit surged 33.2 per cent year-on-year to HK$1.01 billion, thanks the acquisition of Kunlun Gas on June 22, which Sanford Bernstein senior analyst Neil Beveridge estimated to have boosted the firm’s profit by some 30 per cent.