ENN Natural Gas (600803) H2 2023 earnings summary

Executive summary

• FY2023 core profit rose 5.1% YoY to RMB6,378m despite revenue declining 6.7% to RMB143,842m; direct gas sales by platform expanded rapidly.

• Focus shifted further to natural gas after the completed coal mine asset disposal, which generated RMB10,505m in transaction consideration; contracted LNG resources exceeded 10m tons/year.

Financial highlights

• Revenue was RMB143,842m, down 6.7% YoY; gross profit was RMB22,152m, down 5.3%; adjusted EBITDA was RMB20,890m, up 1.5%.

• Total profit rose 7.4% YoY to RMB15,766m; net profit attributable to parent increased 21.3% to RMB7,091m; core EPS rose 5.1% to RMB2.07.

• Core profit attributable to parent increased 5.1% YoY to RMB6,378m from RMB6,067m.

Outlook and guidance

• Domestic natural gas consumption is forecast to grow 6%–7% in 2024, adding 24–28bn m³; 2030 consumption is estimated at 580–600bn m³.

• LNG demand is estimated at 427m tons in 2024 and 588m tons in 2030; domestic LNG imports are projected at 75m tons in 2024 and 133m tons in 2030.

• For 2024–2026, annual dividend payout increases are planned at no less than RMB0.15/share, with annual cash dividends at least 30% of core profit; special dividends are RMB0.25, RMB0.22 and RMB0.18/share over the period.