Yanchang Petroleum International (346) H2 2024 earnings summary

Executive summary

• Revenue increased by 5% year-over-year to HK$29.18 billion, driven by higher sales volume in the PRC despite lower oil prices.

• Net profit was HK$55.6 million, down from HK$580.1 million last year, mainly due to the absence of a one-off gain from subsidiary deconsolidation in 2023.

• The upstream Canadian business saw a 22.95% drop in sales volume and a 29.61% decrease in revenue, but benefited from a significant impairment reversal.

• The downstream PRC business achieved higher sales volume and revenue, with improved operating profit compared to a loss last year.

• No dividend was declared for the year.

Financial highlights

• Revenue: HK$29.18 billion (+5% year-over-year); Net profit: HK$55.6 million (vs. HK$580.1 million prior year).

• Operating profit: HK$90.1 million (vs. loss of HK$234.7 million last year).

• Gross margin remained tight due to increased cost of revenue and lower oil prices.

• Net reversal of impairment loss on property, plant and equipment: HK$137.6 million (vs. HK$158.5 million impairment last year).

• EPS: 4.92 HK cents (vs. 19.89 HK cents last year).

Outlook and guidance

• The company expects continued volatility and weak demand in the global oil and gas market in 2025.

• Strategic focus will be on cost control, digital transformation, and strengthening the oil and gas value chain.

• Capital expenditure is expected to favor anti-cyclical, resilient areas.