HONG KONG: Mainland gas distributor XinAo Gas Holdings posted a 24.3 percent increase in net profit in 2008 or 630 million yuan, thanks to a 22-percent growth in the number of residential users of natural gas.

The company laid down its sales target for its natural gas component at between 2.8 billion and 2.9 billion cubic meters this year, an increase of 2.2 billion cubic meters over 2008.

The company's financial controller and executive director Cheng Chak-ngok yesterday told reporters that the upsurge in gas sales is expected to drive the company's net profit upward by 20 percent through the year.

Last year, the company completed natural gas connections for 710,000 residential customers and 2,548 industrial customers. The figures represent respective increases of 22.2 percent and 20.5 percent year on year. New customers brought the aggregate number of residential customers to 3.6 million and the total number of industrial customers climbed to 10,860.

Meanwhile, the company secured four urban piped gas projects, bringing the total number of projects on the mainland to 72.

Concerning the liquefied natural gas (LNG) business, two LNG projects in Shanxi and Ningxia will be in the pipeline this year. Their completion will enhance the company's LNG capability to 900,000 cubic meters per day.

Cheng said the company's capital expenditure for 2009 will amount to 1.3 billion yuan. The company will set aside 400 million yuan for automobile refueling stations and a mid-sized city gas project. The remaining capital will be invested in the construction of gas pipelines.

The company carries a total debt of 5.4 billion yuan. But Cheng believed the gearing ratio will drop from 66 percent to 50 percent this year given the company's cash flow moved into the black last year.

"The company will lower the debt with internal resource, so it won't affect its dividend payout in the future," he said.

Shares of XinAo yesterday closed at HK$9.17, up 9.16 percent.

(HK Edition 04/10/2009 page16)