Kunlun Energy posts 13.9pc core interim profit growth in first half
Shares of Kunlun Energy plunged more than 5 pc in Hong Kong on Thursday, as investors reacted to an interim results announcement on Wednesday
Kunlun Energy, the natural gas distribution unit of the nation’s largest oil and gas producer PetroChina, reported a better than expected 13.9 per cent core interim profit growth on strong gas sales and processing volume.
The state-backed company, which also owns overseas oil production assets besides its core operation of gas logistics and distribution, had a net profit of 2.42 billion yuan (US$363.5 million) during the first half, little changed from 2.41 billion yuan in the same period last year, it said in a filing to Hong Kong’s bourse on Wednesday.
But when the effect of a 100 million yuan impairment loss on a gas liquefaction plant in Guangdong and a 329 million yuan impairment on accounts receivables are excluded, core net profit amounted to 2.74 billion yuan. .
Kunlun’s Hong Kong-listed shares were down 5.2 per cent to HK$7.15 in mid-morning trading on Thursday.
“The profit was above our estimates on better than expected volume growth,” wrote Sanford Bernstein senior analyst Neil Beveridge in a note.
He said Kunlun’s 19 per cent gas sales growth to 8.8 billion cubic metres in the year’s first half was ahead of the industry’s average of 15 per cent.
“With the effective implementation of China’s air pollution control action plan and [rising] supply of heat [with] natural gas as fuel in northern China ... gas consumption increased significantly,” Kunlun said.
