Zhongyu Energy reported interim FY26 results showing a modest earnings decline but notable margin resilience and stronger cash metrics.
Financial performance • Turnover slipped 7.7 % year on year to HK$6.07 billion, weighed down by softer wholesale gas volumes and a slowdown in pipeline construction. • Profit for the period eased 3.3 % to HK$240.00 million, while basic EPS fell 7.0 % to HK$0.0827. • Excluding foreign-exchange gains and impairment charges, non-HKFRS profit attributable to shareholders improved 28.2 % to HK$153.36 million. • Non-HKFRS EBITDA was unchanged at HK$785.00 million, reflecting disciplined cost control and a lower financing burden; finance costs fell 16.7 % to HK$173.75 million. • Overall gross margin widened to 12.8 % (1H25: 12.0 %), led by a rebound in gas sales margin to 9.3 % and higher profitability in pipeline construction (77.8 %).
Balance-sheet and liquidity • Total assets rose 8.3 % since end-2025 to HK$27.69 billion. • Net current liabilities narrowed to HK$2.33 billion from HK$5.59 billion, aided by a shift in debt maturity; current borrowings fell HK$2.33 billion. • Cash and bank balances increased to HK$1.39 billion (31 Dec 25: HK$1.08 billion). • Net gearing ticked up slightly to 1.49× (31 Dec 25: 1.46×) as total borrowings and lease liabilities expanded 11.5 % to HK$14.74 billion. • NAV per share improved 10.1 % to HK$2.94.
Operating highlights • Retail gas volumes edged up 2.5 % to 1.17 billion m³, yet total gas sales declined 13.0 % to 1.45 billion m³ on sharply lower wholesale LNG deliveries. • Segment revenue mix: – Sales of Gas: HK$5.22 billion (-7.1 %; 86.1 % of group revenue) – Gas Pipeline Construction: HK$262.56 million (-30.9 %) – Smart Energy: HK$298.96 million (-10.0 %) – Value-added Services: HK$211.26 million (+39.5 %), buoyed by property sales and kitchen appliance offerings – CNG/LNG Vehicle Filling: HK$71.18 million (-22.6 %) • Penetration of residential pipeline connections reached 72.0 %, with 70,145 new household hookups in the half.
Capital management • The company repurchased 43.5 million shares during April–June 2026 for HK$119.51 million, held as treasury stock for potential incentive plans or cancellation. • A final dividend of HK$0.03 per share for FY25 (HK$81.03 million) was approved; no interim dividend for 1H26 is proposed.
Strategic outlook Management will concentrate on: 1. Core city-gas growth via rural expansion, renovation of aging pipeline networks and new commercial scenarios such as “night economy” districts. 2. Accelerating smart-energy diversification, with emphasis on biomass projects and ASEAN market entry, supported by recent acquisition integration and green-loan financing. 3. Advancing digital and AI initiatives to enhance safety monitoring, operational efficiency and customer analytics. 4. Strengthening ESG governance, pipeline safety and talent development to underpin sustainable, high-quality growth.