Xinao Gas 2007 Profit Climbs 34% as China’s Energy Demand Rises
Xinao Gas Holdings Ltd., a piped-gas distributor in which the World Bank owns a stake, said 2007 profit rose 34 percent after it expanded its operations in China to benefit from the nation’s rising demand for energy.
Net income increased to 507.5 million yuan ($73 million), or 0.503 yuan a share, from a revised 379.6 million yuan, or 0.387 yuan, a year earlier, Xinao Gas, based in the northern province of Hebei, said in a statement to the Hong Kong stock exchange today. That compared with the 507 million yuan median estimate in a Bloomberg survey of five analysts.
Xinao Gas has expanded the number of city gas projects to 67 as the government promotes cleaner-burning fuels. China, which uses coal and oil to meet 90 percent of its fuel needs, wants gas to account for 5.3 percent of its energy mix in 2010 compared with about 3 percent now.
Sales rose to 5.76 billion yuan from 3.4 billion yuan. Xinao Gas will pay a final dividend of 13.42 Hong Kong cents per share, compared with 7.75 Hong Kong cents a year earlier.
Xinao shares have fallen 11 percent this year, outpacing the 10 percent decline in the benchmark Hang Seng Index. The stock rose 0.6 percent to HK$13.78 in Hong Kong today, before the 2007 earnings were announced.
The gas distributor plans to increase sales by as much as 50 percent to 2.2 billion cubic meters this year as demand for the cleaner-burning fuel grows, Financial Director Yu Jianchao said Feb. 18.
The company said then it will invest 450 million yuan in a city gas project of Zhaoqing in the southern province of Guangdong, gaining access to 50,000 people.
Xinao will source the fuel from a liquefied natural gas plant in nearby Beihai city and supplement that with fuel shipped from an LNG terminal operated by China National Offshore Oil Corp. in Dapeng, Yu said in February. After 2012, Xinao will get its supplies from the 8,000-kilometer (4,970-mile), second West-East pipeline being planned by PetroChina Co., he said.
The company will acquire similar city gas projects in Guangdong, Guangxi, Fujian and Anhui provinces this year, Yu said.
International Finance Corp., the private investment arm of the World Bank, paid $10 million for 2.71 percent of Xinao Gas and provided a five-year $25 million loan to the company in May 2004. The World Bank unit mainly invests in emerging-market companies to create jobs and build economies.
Tags: CNOOC, Gas, LNG, PetroChina