(Hong Kong, 9 August 2001) - Xinao Gas Holdings Limited ("Xinao Gas") (Stock Code: 8149) today announces its interim results for the six months ended 30 June 2001.
This is the first set of results announced by Xinao Gas following its listing on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited on 10 May this year. For the six months ended 30 June 2001, Xinao Gas together with its subsidiaries (the "Group") recorded a turnover of approximately RMB 99 million, representing an increase of 2.6 times over the corresponding period last year. Xinao Gas achieved remarkable growth in net profit of 5.3 times over the same period last year, which amounted to approximately RMB 28 million. Earnings per share was RMB 5.86 cents, representing an increase of 4.5 times over the same period last year. The board of directors of Xinao Gas has resolved not to recommend the payment of an interim dividend. Retained funds will be used to develop existing gas projects and to make investment in new projects.
Mr. Wang Yusuo, Chairman and Executive Director of Xinao Gas, said, "The Group began its operations in the Langfang Economic and Technical Development Zone back in 1993, after eight years of operations, Langfang Xinao's business has entered into a high return phase of its business cycle. Coupled with encouraging performance of the projects in Liaocheng and Huludao, the Group was able to achieve substantial growth in terms of turnover and profit. We are very pleased with this set of results."
The Group derives its revenue primarily from connection fees which attributed to approximately 78% of the Group's total turnover and reached approximately RMB 77.2 million, representing an increase of 3.1 times over the same period last year. Gas usage charges were approximately RMB 21.4 million, representing an increase of 1.3 times over the same period last year.
During the half-year period, new gas connections were made to 17,989 households and 53 commercial and industrial sites, of which the commercial and industrial customers were connected to a total installed designed daily capacity of gas appliance facilities of 39,500 cubic metres. As at 30 June 2001, the Group had made gas connections to a total of 84,004 households and 296 commercial and industrial sites, of which the commercial and industrial customers were connected to a total installed designed daily capacity of gas appliance facilities of 183,363 cubic metres. In respect of gas usage, the Group sold a total of 15,21,3000 cubic metres of gas during the first six months of 2001. An additional of 62 kilometres of intermediate pipelines and main pipelines were built during the half-year period resulting in a total length of 330 kilometres. The Group owns and operates nine processing stations. The Group also achieved encouraging progress in the setting up of facilities to manufacture stored value card gas metres. The Group has completed the installation of production facilities with an annual capacity of 100,000 metres in the half-year period, which was ahead of the original schedule. This has enabled further cost savings for the Group.
Mr. Wang continued, "Subsequent to the listing of the Group in May 2001, the Group acquired projects in Huangdao District of Qingdao City, Shandong Province and Pinggu and Changping in Beijing Municipality. The Group has also successfully established new companies in Chengyang of Qingdao City and Zhucheng in Shandong Province. Furthermore, the Group has obtained the exclusive operation rights to develop piped gas supply in the Yantai Economic and Technical Development Zone, Shandong Province. In total, the Group had obtained relevant approvals to operate piped gas businesses in 10 locations. As the second half performance is traditionally stronger, we believe that these projects will contribute attractive returns to the Group."
In preparation for the hosting of the Olympic Games in 2008, the Beijing Municipality Government will spend RMB 45 billion on environmental protection and preservation, and aims to achieve a minimum of second class air quality standards for the city. The hosting of the Olympic Games will further enhance the implementation of government policy on promoting the use of natural gas. It will also speed up infrastructure and property development in neighbouring area of the Beijing Municipality. These inititaives will bring significant opportunities for the development of the natural gas industry.
Mr. Wang added, "The Group's project in Changping is located near to the site planned for the 2008 Olympic Village. Some of the stadiums and venues to be used in the 2008 Olympic Games will also be built in Qingdao City, Shandong Province where the Group has operations in the Huangdao District and Chengyang District. We believe the gas penetration rate in these locations will further increase thereby contributing encouraging returns to the Group. We have also commenced negotiations with local governments at locations along or nearby the West to East Pipelines with a veiw to develop and operate piped gas business in these areas."
Mr. Wang concluded, "Going forward, the Group will take advantage of opportunities from the West to East Pipelines and the hosting of the 2008 Olympic Games by Beijing. We will strive to remain in the leading position within the natural gas industry and yield satisfactory returns for our shareholders."
ABOUT XINAO GAS HOLDINGS LIMITED
Xinao Gas is mainly engaged in the investment in, and the operation and management of, gas pipeline infrastructure and the sale and distribution of piped gas. The Group's other business activities include the sale of gas appliances and equipment, as well as the provision of repair and maintenance services. Currently, the Group's business has expanded from Langfang City in Hebei Province to Liaocheng, Zhucheng, Yantai Economic and Technical Development Zone, and Huangdao and Chengyang of Qingdao City which are located in Shandong Province, Miyun, Pinggu and Changping in Beijing Municipality and Huludao in Liaoning Province, a total of ten regions.
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