The Hong Kong and China Gas Company (3) H1 2024 earnings summary

Executive summary

• Core operating profit rose 2% year-over-year to HK$3,186 million (HK$3.19 billion), while profit attributable to shareholders fell 16% to HK$3,040 million due to lower non-operating gains and one-off items in 2023.

• Revenue declined 6% year-over-year to HK$27,496 million, mainly due to RMB depreciation and lower gas sales in Hong Kong.

• Hong Kong gas business remained stable, with commercial gas sales growth offsetting weaker residential demand; two tariff increases were implemented in 2024.

• Mainland city-gas business saw a 7% increase in gas sales volume and improved dollar margin, with industrial and commercial segments showing robust growth.

• Renewable energy, hydrogen, SAF, and green methanol initiatives advanced, with new partnerships and capacity expansions.

Financial highlights

• Revenue: HK$27,496 million (down 6% year-over-year).

• Core operating profit: HK$3,186 million (up 2% year-over-year).

• Profit attributable to shareholders: HK$3,040 million (down 16% year-over-year).

• Basic EPS: HK16.3 cents (down from HK19.4 cents year-over-year).

• Interim dividend of HK12 cents per share declared.

Outlook and guidance

• Gas sales in Hong Kong expected to remain stable for 2024, with tariff increases helping offset cost pressures.

• Mainland city-gas and renewable energy businesses projected to continue expanding in H2 2024, with new projects and increased profits.

• Focus on expanding green hydrogen, SAF, and green methanol production to meet low-carbon fuel demand.

• Dollar margin in Mainland city gas expected to rise by 5 cents/m³.

• Renewable energy grid-connected capacity targeted at 2.3 GW, with rapid profit growth anticipated.