China Gas fuel sales growth slows as lockdown batters demand
China Gas sold 25.4 billion cubic metres of gas in the year ended March 31, equivalent to roughly 8 per cent of China’s total gas demand, but the rate of growth collapsed from a 32 per cent surge in the year earlier period
SINGAPORE: China Gas Holdings Ltd , one of China‘s largest independent piped gas distributors，said on Friday gas sales in its latest financial year rose just 2.9 per cent, a sharp fall from the previous year as the coronavirus pandemic hit fuel demand.
Demand was worst hit during February-March when sales fell 13 per cent versus the same period last year, company executives told reporters.
However, demand started to recover strongly from April as the Chinese economy reopened, leading the firm to forecast an annual growth of 15 per cent in total gas sales this year.
China Gas sold 25.4 billion cubic metres of gas in the year ended March 31, equivalent to roughly 8 per cent of China’s total gas demand, but the rate of growth collapsed from a 32 per cent surge in the year earlier period.
“Adversely impacted by COVID-19, negative growth for energy consumption kicked in for the first quarter of 2020 as energy demand derived from industrial, commercial and transportation sectors contracted noticeably,” the firm said its filing to the Hong Kong stock exchange.
The group, which earlier said total revenue rose by 0.3 per cent to HK$59.54 billion ($7.68 billion), noted gas sales to households had grown by a quarter and it had added 5.4 million new residential users last year, an increase of 6.3 per cent. Gas sales to industry rose 5.2 per cent, while those to the commercial sector contracted 9 per cent.
Sales to the fuel retail sector, including liquefied natural gas and compressed natural gas filling stations, fell 16 per cent to 1 billion cubic metres, as transportation came to a near halt during coronavirus-related lockdowns.
Sales of liquefied petroleum gas, used for cooking and as petrochemical feedstock, dropped by an annual 4.2 per cent to 3.83 million tonnes.
Company chairman Liu Minghui said his firm would benefit from Beijing’s plan to launch a planned national oil and gas pipeline group in September that will help lower its fuel purchase cost from upstream gas producers.
“The new national pipeline group will help diversify gas supplies and bolster our company’s gross margins,” Liu said.
The firm will keep its capital spending largely steady in the new year at HK$10 billion.
The company said it had completed construction of a gas transmission pipeline network with a total length of 402,381 km.
The firm expected its distribution network in northeast China to generate 500 million cubic metres of gas sales this year, due to its proximity to the Russia-China Power of Siberia project that started pumping gas to China in late 2019.
China Gas’ Hong Kong listed shares have fallen 6.8 per cent so far this year, versus a 14 per cent fall in the broader Heng Seng Index .