Beijing Gas Group (BGG) enjoyed a double-digit gain in revenue last year, helped by China’s coal-to-gas conversion push for rural households as well as stronger sales to power plants.
The business racked up HK$48.65 billion (US$6.2 billion) in revenue in 2018 – up 22% year on year and representing nearly three-quarters of parent company Beijing Enterprises Holdings’ total turnover of HK$67.76 billion (US$8.63 billion).
While Beijing Enterprises said all four of its business segments – gas distribution, beer, water and environmental, and solid waste treatment – had achieved an “outstanding performance”, BGG was clearly the star performer. Beijing Enterprises not only enjoyed a 17.8% jump in revenue but also saw its profit climb 10.3% to HK$7.58 billion (US$965.6 million).
By volume, BGG’s gas sales jumped 15.4% to 16.83 bcm, helped by fuel conversion projects, heavier usage of boilers and an increase in demand from power plants, it said. BGG completed coal-to-gas conversions for around 24,600 households in 57 villages throughout 2018.
During the year, the company signed up 190,000 new household customers and 8,611 new public sector clients. As of December 31, 2018, it had around 6.18 million piped gas subscribers in Beijing and approximately 23,500 km of natural gas pipelines in operation.
Beijing Enterprises also earned a profit of HK$1.7 billion (US$216.6 million) from its China Gas Holdings business, up 22.1% from 2017. During the six months ending September 30, 2018, China Gas’ sales increased 33.1% year on year by volume to 10.98 bcm. It also connected 2.54 million new households, bringing the total number of households connected to date to 27.11 million as of September 30, 2018.
The group’s gas transmission business, PetroChina Beijing Gas Pipeline, in which Beijing Enterprises has a 40% equity interest alongside majority partner PetroChina, was in worse shape. Its share of post-tax net profits from the venture slumped 26.6% to HK$1.67 billion (US$212.8 million). Beijing Enterprises blamed this on the adjustment from September 2017 of inter-provincial natural gas pipeline transmission pricing methodology. By volume, the venture’s gas transmission grew 27.9% to 49.4 bcm.