United Energy Group (467) H1 2024 earnings summary

Executive summary

• Turnover increased 35.6% year-over-year to HK$8,439.8 million, driven by higher production, prices, and trading business.

• Profit attributable to owners fell 39.3% to HK$1,010.3 million due to higher costs, depreciation, and lower gross margin.

• EBITDA decreased 5.8% to HK$4,156.4 million, while net cash from operating activities rose 52.3% to HK$4,343.8 million.

• Average daily working interest production rose slightly to 102,298 boed, with MENA growth offsetting Pakistan declines.

• No interim dividend declared; a special dividend of HK4 cents per share was approved post-period.

Financial highlights

• Gross profit was HK$1,888.6 million (22.4% margin), down from HK$2,549.3 million (40.9%) due to increased depreciation and amortisation.

• Operating expenses for E&P rose 6.7% to HK$607.3 million; per boe cost stable at US$4.2.

• Depreciation, depletion, and amortisation increased 36.3% to HK$2,550.1 million.

• Finance costs up 13.8% to HK$163.5 million, mainly due to higher prepayment facility usage.

• Net cash from operating activities increased 52.3% to HK$4,343.8 million.

Outlook and guidance

• 2024 production target: average daily gross production of 176,300–197,600 boed; working interest production of 101,600–113,500 boed.

• Capital expenditure guidance for 2024 is US$880–930 million, focused on exploration and development.

• Pakistan assets expected to deliver 35,500–40,900 boed; Iraq 55,100–59,400 boed; Egypt 11,000–13,200 boed.

• Continued focus on operational efficiency, capital discipline, and expansion in emerging markets.