United Energy Group (467) H1 2025 earnings summary

Executive summary

• Profit attributable to owners fell 26.7% year-over-year to HK$740.1 million, mainly due to lower realized oil prices and higher costs.

• Turnover decreased 4.2% to HK$8.09 billion, primarily from lower average realized sales prices, partially offset by growth in trading and clean energy.

• Average daily working interest production rose 9.3% to 111,762 boed, driven by MENA asset growth, offsetting declines in Pakistan.

• Clean energy segment expanded with the acquisition of a 99MW wind power project in Pakistan.

• Three commercial discoveries were made, supporting future reserves and production.

Financial highlights

• Gross profit fell 30.8% to HK$1.31 billion, with gross margin dropping to 16.1% from 22.4% year-over-year.

• Adjusted EBITDA was HK$3.43 billion, down 17.5% from HK$4.16 billion, mainly due to lower net realized sales prices.

• Net cash inflow from operating activities was HK$2.74 billion, a 36.9% decrease year-over-year.

• Basic EPS dropped 26.2% to 2.88 HK cents.

• Gearing ratio improved to 9.7% (from 11.6%), but current ratio fell to 0.87x.

Outlook and guidance

• 2025 production target: average daily gross production of 178,900–204,200 boed; working interest production of 104,200–120,600 boed.

• Capital expenditure for 2025 is expected to reach US$750 million, focused on exploration, development, and construction.

• Focus remains on financial discipline, operational efficiency, and expanding clean energy portfolio.

• Pakistan gas production expected to remain stable due to strong domestic demand and declining local supply.

• MENA assets, especially Iraq, expected to sustain high production and long reserve life.