HONG KONG--(BUSINESS WIRE)--Highlights
- Revenue from natural gas business increased 173.1% to HK$115.3 million
- Total gas sales volume sold increased by 200.3% to 53.9 million cubic meters
- Profit for the period attributable to owners of the Company amounted to HK$2.2 million, of which the Group recorded a loss of HK$3.5 million last year
- The Group’s natural gas projects covered 8 provinces
- Successfully introduced Beijing Gas as the single largest shareholder and will continue to explore and identify more synergistic opportunities
Financial Highlights
| 6 months ended 30 June | ||||||
| HK$ ‘000 | 2016 | 2015 | ||||
| Revenue | 115,296 | 90,742 | ||||
| Sales of natural gas and other related products | 115,296 | 42,210 | ||||
| Sales of book and specialized products | - | 48,532 | ||||
| Gross Profit | 4,175 | (4,193) | ||||
| Profit/(loss) for the period attributable to owners of the Company | 2,208 | (3,457) | ||||
| Basic earnings per share (HK cents) | 0.03 | (0.07) | ||||
Blue Sky Power Holdings Limited (or “the Company”, together with its subsidiaries, the “Group”, HKSE stock code: 6828) announced its interim results for the 6 months ended 30 June 2016 (“HY2016”). In HY2016, Blue Sky Power recorded a profit attributable to owners of the Company amounted to HK$2.2 million (HY2015: loss 3.5 million), and recorded total revenue of HK$115.3 million (HY2015: 90.7 million), representing a growth of 27.1% year-on-year, which came entirely from the natural gas business.
Rapid growth in natural gas business
Since 2014, the Group has focused on transforming itself into an integrated natural gas provider, distributor and operator, with an emphasis on the mid- to downstream side of the natural gas industry value chain.
Owing to the growth of our natural gas operations during HY2016, including the natural gas trading business, the Group recorded natural gas segment profit and revenue of HK$46.4 million (HY2015: HK$40.8 million) and HK$115.3 million (HY2015: HK$42.2 million), representing an increase of 13.8% and 173.1% respectively. Total gas sales volume sold by the Group increased by 200.3% year-on-year, amounted to 53.9 million cubic meters (HY2015: 18.0 million cubic meters). The growth is attributable to existing projects that have become operational and the acquisition of new projects that were immediately operational.
In HY2016, the Group successfully ramped up its natural gas trading business in China, the revenue of which increased from nil to HK$68.5 million for HY2016, with the Tai’an Project in Shandong, the acquisition of which was completed in October 2015, contributing a revenue of HK$24.7 million for HY2016.
As at 30 June 2016, the Group’s natural gas projects covered 8 provinces, namely Shandong, Hainan, Jiangsu, Guizhou, Liaoning, Hubei, Sichuan and Anhui Provinces. The Group owned a total of 34 gas refueling stations for vehicles and 2 city gas projects, while the geographical coverage of its trading and distribution business included Shandong, Hainan, Anhui and Zhejiang Provinces.
Beijing Gas as the single largest shareholder
During HY2016, the Group successfully introduced Beijing Gas Group Co. Ltd. (“Beijing Gas”) as our single largest shareholder. Beijing Gas, a wholly-owned subsidiary of Beijing Enterprises Holding Limited (“BEHL”), has subscribed shares and convertible bonds of the Company with a total investment amount of HK$1.3 billion.
Strong cash position and low gearing
The Group’s gearing ratio, which is total borrowings divided by total assets, was at 18.7% as at 30 June 2016, about the same as it was at the end of 2015. Excluding convertible bonds, the gearing ratio was 6.7% as at 30 June 2016, compared to 9.6% as at 31 December 2015. Cash to total liabilities was 1.4 as at 30 June 2016, as compared to 0.2 as at 31 December 2015.
Cash and bank balances of the Group has greatly improved to HK$1.0 billion as at 30 June 2016. Given the Group’s strong cash position, below industry average gearing level, and a quality profile of institutional and industry investors, the Group is expected to significantly expand its investment in the natural gas industry and pursue opportunities in a time of industry consolidation to generate exceptional return for its shareholders.
Future Development Strategies
The green energy policies promoted under China’s “13th Five-Year Plan” and “One Belt One Road” initiative have crucial implications for the natural gas industry. The Group will take full advantages of the initiatives and expand both our customer base and market share along the coastal and inland areas accordingly, as well as to be comprehensively involved in the entire industry value chain.
The Group has adopted its own “One Belt, One Road Expansion Strategy” to expand along key coastal economic areas such as the Jing-Jin-Ji Economic Circle and the Yangtze River Delta. The Group will leverage on the import and distribution of low-cost overseas LNG, and aims to significantly ramp up its distribution network along China’s coastal areas to reach a wider potential customer base in order to further increase its market share and bargaining power with upstream gas suppliers.
For inland, the Group will develop along the “One Road”, from Shanxi all the way to the western and north-western provinces of China. The Group will also select projects with multiple sources of pipeline gas and/or where there are gas rich upstream gas fields that provide lower cost of gas.
With the industry and financial resources gained from Beijing Gas, our current single largest shareholder, we will continue to explore and identify more synergistic opportunities with them, in terms of co-investments and cooperation in both project and regional levels. Blue Sky Power will also act as an overseas financing platform in the capital markets for Beijing Gas.
Mr. Tommy Cheng, Co-Chairman of Blue Sky Power, stated that, “Through stringent management, various bench-marking measures and dedicated development plans, the Group succeeded in achieving strong growth within a short period of business transformation. We constantly enhance operational and financial efficiencies in order to ensure an ongoing, robust and sustainable growth, as we endeavour to pursue long-term shareholder value.”
Blue Sky Power Holdings Limited
Since 2014, Blue Sky Power Holdings Limited (HKSE stock code: 6828) has focused on transforming itself into an integrated natural gas provider, distributor and operator, with an emphasis on the mid- to downstream side of the natural gas industry value chain. Our natural gas business encompasses: (i) construction and operation of compressed natural gas (“CNG”) and liquefied natural gas (“LNG”) refueling stations for vehicles; (ii) construction of natural gas pipelines and operation of city gas projects by providing piped gas; (iii) direct supply of LNG to end-users; and (iv) trading and distribution of CNG and LNG.
Blue Sky Power has adopted its own “One Belt, One Road Expansion Strategy” to expand along key coastal economic areas and north-western provinces that have rich gas source. The Group has business presence in several provinces in the PRC, including Shandong, Hainan, Anhui, Hubei, Sichuan and Liaoning.