ENN Energy (2688) H1 2024 earnings summary

Executive summary

• Revenue grew 0.9% year-over-year to RMB54,587 million for the six months ended 30 June 2024, while profit attributable to owners fell 22.8% to RMB2,573 million due to reduced international LNG sales and weaker construction business.

• Core profit from domestic businesses increased 9.5% to RMB3,080 million, reflecting a shift toward sustainable business segments.

• Retail gas sales volume grew 4.5% year-over-year to 12,710 million m³, with 775,000 new residential households added.

• Integrated energy business sales volume surged 26% year-over-year to 19.74 billion kWh; value added business gross profit up 23% to RMB1,401 million.

• Interim dividend declared at HK$0.65 per share.

Financial highlights

• Gross profit declined 9.7% year-over-year to RMB6,465 million, with gross margin down 1.4 percentage points to 11.8%.

• Basic earnings per share dropped 22.4% to RMB2.29.

• Operating cash inflow was RMB3,266 million; net gearing ratio improved to 24.3% from 25.3% at year-end 2023.

• Interest-bearing debts reduced to RMB19,825 million, with consolidated financing cost at 3.4%.

• Free cash flow increased to RMB630 million.

Outlook and guidance

• Focus remains on expanding gas sales, optimizing product mix, and growing integrated energy and value added businesses.

• 2024 targets: IE sales volume and VAB gross profit to grow 20–30%; retail gas sales volume to rise >5%; retail gas gross profit to increase >10%.

• New C/I development target: 12–14 million m³/day; new residential development: 1.4–1.6 million households.

• Capex guidance at approx. RMB8 billion; core profit from domestic basic business to grow >10%.

• Updated Decarbonisation Action 2030 to be published in November 2024, outlining net zero pathway.