Source: Media Outreach
Achieved Profit TurnaroundAnnual Profit Reached Approx. HK$360 millionOperating Profit of Oil and By-product Trading Business in the PRC Increased by 42.5% to nearly HK$82 millionFinancial Highlights:Overall revenue amounted to approx. HK$19.8 billion (2020: HK$27.2 billion)
Profit of the year reached approx. HK$358 million (2020: loss of approx. HK$793 million)
Operating profit of the exploration, exploitation and operation business increased significantly to HK$23.91 million (2020：loss of approx. HK$68.24 million)
Novus’ sales volume of oil and gas amounted to 482,000 BOE, contributed revenue of approx. 200 million (2020: approx. 95.83 million)
Operating profit of the oil and by-product trading business in the PRC increased by 42.5% yoy to approx. HK$81.69 million (2020: HK$57.34 million)
HONG KONG SAR – Media OutReach – 25 March 2022 – Yanchang Petroleum International Limited (“Yanchang Petroleum International” or the “Company”, together with its subsidiaries, the “Group”; Stock Code: 00346) today announces its audited annual results for the year ended 31 December 2021 (“year under review”).Starting from the second half of 2021, the petroleum market underwent changes from oversupply to undersupply, resulting in international oil prices rebounding significantly. As the pandemic subsided, the vaccination rate of major economies in Europe and the USA significantly increased and lockdown measures were gradually lifted, leading to a robust demand in the overall oil market. Yanchang Petroleum International seized the opportunity to position its upstream business in advance while optimizing the operation efficiency of the oil and gas business chain. Consequently, it had recorded its best performance in the past seven years, successfully achieving a profit turnaround. During the year under review, the Group’s revenue mainly derived from the oil and gas production business in Canada and the oil and by-products trading business in the PRC, with the overall revenue reaching approximately HK$19.8 billion (2020: HK$27.2 billion). The profit of the year amounted to approximately HK$358 million, as compared to the loss of approximately HK$793 million in 2020. The Board does not recommend the payment of any dividends for the year ended 31 December 2021.Upstream oil and gas production business in CanadaNovus Energy Inc. (“Novus”) is engaged in Novus is engaged in the business of exploration, exploitation and production of oil and natural gas in Western Canada. During the year under review, Novus achieved sales volume of oil and gas of 482,000 barrel of equivalent (“BOE”) and contributed revenue of approximately HK$200 million as compared to sales volume of 463,000 BOE and revenue of approximately HK$95.83 million in 2020.During the year under review, the operating profit of the exploration, exploitation and operation business amounted to approximately HK$23.91 million, as compared to an operating loss of HK$68.24 million in the past year. In the first half of 2021, Novus restarted the operation of its long-clos wells, increased its production volume and made reasonable inventory adjustment according to oilfield operation in a bid to control costs and optimize economic benefits. During the year under review, the net drilling by Novus was 33 wells, and Novus had 427.2 horizontal wells and 71.8 vertical wells in production as of 31 December 2021. With the local government gradually lifting the pandemic-related lockdown measures, the staff at the Novus site strived to cut down costs while keeping as many wells in normal operation as possible. The operating expenses in 2021 were CAD9.30 million in total, slightly up by CAD270,000 as compared with CAD9.03 million in the same period last year.Downstream Oil and By-product Sales Business in the PRCDuring the year under review, due to a decrease in sales volume from 6.36 million tonnes in 2020 to 4.89 million tonnes in 2021, the revenue of oil and by-products trading business in the PRC was HK$19,577 million, contributing a segment operating profit of approximately HK$81.69 million, which represented an increase of 42.5% year-on-year.Henan Yanchang Refined Oil BusinessBenefited from the outstanding performance in oil distribution, external sourcing and terminal development of Henan Yanchang Petroleum Sales Co. Limited (“Henan Yanchang”), the business of Henan Yanchang has achieved consistent growth. During the year under review, Henan Yanchang sold a total of 4.095 million tonnes of refined oil, achieved operating income of approximately RMB23.36 billion with total operating profit of approximately RMB31.141 million.For oil distribution, Henan Yanchang actively developed regional markets such as Ningxia, Sichuan, Gansu and Qinghai, and developed 7 new customers during the year under review. In addition, Henan Yanchang leased oil tanks through the co-operation with Sinopec to balance market fluctuations while expanding sales channels. For external sourcing, Henan Yanchang continued to deepen the cooperation with its customers, actively expanded its business in Ningxia, Hubei and Henan, and acquired 19 new customers and 35 suppliers; Henan Yanchang also completed the upgrading and transformation of three gas stations in Xiangcheng and put them into operation. It recorded the highest intraday retail sales volume of over 22.5 tonnes, and signed contracts with two direct supply gas stations in Ningxia region.Yanchang Zhejiang Oil and By-product BusinessYanchang Petroleum (Zhejiang FTZ) Ltd. (“Yanchang Zhejiang”) recorded oil and by-products product sales volume of 1.12 million tonnes in 2021, representing a year-on-year increase of 236%. The sales revenue was RMB3,760 million, including sales revenue realized from domestic raw oil trade off RMB 2,888 million, and revenue from factory finished product sales of RMB872 million. The operating profit in 2021 was RMB 19.93 million and receivables recovery rate was 100%.Due to the emergence of the new mutant virus strains and USA working with many other countries to release the countries’ oil reserves to the market in an attempt to suppress the rising oil prices, the uncertainties in the market had been increased. Zhejiang Yanchang took the approach of pre-price setting to actively mitigate risks while safeguarding the price and quality of imported raw materials. In addition, in view of the implementation of the new taxation policy, which raised the procurement cost of the products including diluted asphalt and other products, the demand on the corporations’ cash flow was increased.Mr. Feng Yinguo, Chairman of Yanchang Petroleum International, said, “Going forward in 2022, the global energy crisis may continue to escalate in the first half of the year. The geopolitical conflicts have profoundly shaken the global energy landscape, which may result in high volatility in international oil prices. The surging oil prices may prompt most countries to accelerate the pace of energy transition. The Group will continue to strengthen its investments in technology, capital and management, while adjusting its organizational structure and business model to cope with the Group’s development strategy in a flexible manner, so as to gear up for the challenges in the new round of industry cycle. For our upstream business, we will continue to boost the production and operation of Novus, and to develop the downstream oil and by-product sales business in the PRC, and actively explore the international petrochemical trading business. As an integrated trading and sub-contracted refining company, Yanchang Zhejiang will take the initiative to adjust this operation plan to cope with external changes.”The issuer is solely responsible for the content of this announcement. – Published and distributed with permission of Media-Outreach.com.
