ENN ENERGY(HK:02688)2023-09-13 09:54Financial Performance - Revenue for the first half of 2023 was RMB 54,111 million, a decrease of 7.2% compared to RMB 58,332 million in the same period of 2022[7]. - Gross profit increased by 3.8% to RMB 7,157 million from RMB 6,894 million year-on-year[7]. - Profit attributable to owners of the company rose by 7.3% to RMB 3,333 million, up from RMB 3,105 million in the previous year[7]. - The company reported a net profit of RMB 3,784 million for the six months ended June 30, 2023, compared to RMB 3,502 million in the prior year, marking an increase of approximately 8.0%[78]. - The basic and diluted earnings per share for the period were both RMB 2.95, up from RMB 2.75 in the previous year, indicating a growth of about 7.3%[78]. - The company reported total comprehensive income of RMB 3,865 million, compared to RMB 3,687 million in the same period last year, representing an increase of approximately 4.8%[78]. - The company’s financing costs for the period were RMB 340 million, slightly higher than RMB 320 million in the previous year[78]. - The company reported a total profit of RMB 7,157 million for the six months ended June 30, 2023, compared to RMB 6,894 million for the same period in 2022, marking an increase of 3.8%[104]. - For the six months ended June 30, 2023, the pre-tax profit was RMB 3,333 million, an increase from RMB 3,105 million in the same period of 2022, representing a growth of approximately 7.3%[116]. Customer Growth and Service Expansion - The number of new residential gas users added during the period was 998, an increase of 1.9% from 979 in the previous year[7]. - Cumulative residential users reached 28,919 thousand, representing a growth of 7.9% from 26,814 thousand[7]. - The number of industrial and commercial users decreased by 9.9% to 8,233 locations from 9,138[7]. - The company has provided gas supply to over 28.92 million household users and 232,695 commercial users, enhancing customer service experience through innovative business models[15]. Energy Projects and Sales - Integrated energy projects in operation increased to 252, up from 177, marking a growth of 75 projects[8]. - Integrated energy sales volume surged by 45.0% to 15,664 million kWh from 10,801 million kWh[8]. - The comprehensive energy sales volume reached 15.664 billion kWh, a year-on-year increase of 45.0%, with comprehensive energy business revenue and gross profit growing by 30.3% and 30.8% to RMB 6.988 billion and RMB 0.913 billion, respectively[13]. - The company signed 21 new low-carbon park projects, 956 low-carbon factory projects, and 73 low-carbon building projects, with a total energy scale exceeding 14.6 billion kWh per year[13]. Dividend and Shareholder Information - The company maintained an interim dividend of HKD 0.64 per share, unchanged from the previous year[7]. - The company declared an interim dividend of HKD 0.64 per share, equivalent to approximately RMB 0.59, representing 17% of the group's core profit for the period[35]. - The company is required to withhold a 10% corporate income tax on the interim dividend distributed to non-resident corporate shareholders starting from the 2023 interim dividend[37]. Financial Position and Cash Flow - Operating cash inflow for the six months ended June 30, 2023, was RMB 4.003 billion, generating positive free cash flow of RMB 412 million[16]. - The company had cash and cash equivalents of RMB 10.938 billion as of June 30, 2023, an increase of RMB 2.882 billion compared to the end of the previous year[20]. - Total borrowings increased to RMB 21.929 billion, up RMB 2.137 billion from the end of the previous year[22]. - The net debt-to-equity ratio decreased by 2.3 percentage points to 23.5% as of June 30, 2023[22]. - The company reported a net cash outflow from investing activities of RMB 2,069 million for the six months ended June 30, 2023, compared to RMB 1,256 million for the same period in 2022, indicating a significant increase in investment expenditures[86]. - The cash flow from financing activities for the six months ended June 30, 2023, was RMB 915 million, slightly down from RMB 937 million in the same period of 2022[86]. Risk Management and Compliance - The company implemented risk management policies to mitigate commodity price risks associated with LNG contracts linked to international oil and gas price indices[28]. - The company has maintained compliance with the Corporate Governance Code as per the Listing Rules during the six months ending June 30, 2023[38]. - The company received an AA rating from MSCI for its ESG performance, reflecting its commitment to environmental, social, and governance responsibilities[39]. Share Options and Incentive Plans - The company has adopted the 2012 Share Option Plan, granting a total of 24,328,000 options to employees and business consultants[53]. - The total number of share options granted to directors is 1,267,125, with 100,000 options expired and 73,925 options reclassified, resulting in 1,093,200 options remaining unexercised as of June 30, 2023[60]. - The share options have an exercise price of HKD 76.36, with various exercise periods ranging from April 2020 to March 2029[59]. - The company has granted stock options and reward shares to directors, with specific details outlined in the report[47]. Acquisitions and Market Strategy - The company acquired a 60% stake in Haining Xinxin Natural Gas Co., Ltd. on May 12, 2023, aiming to expand its market share in the natural gas retail business[159]. - The company aims to enhance its market presence through strategic acquisitions and divestitures, as evidenced by the recent sale of non-core subsidiaries[167]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service delivery[83].