Citic Resources Holdings Ltd, a unit of China's fourth-biggest oil producer, said profit jumped almost fourfold in the first half as oil output increased while prices soared to records.
Net income climbed to HK$520.1 million (US$67 million), or 9.84 cents a share, from HK$138.3 million, or 2.83 cents a share, a year earlier, the company said in a statement to the Hong Kong stock exchange yesterday. Sales gained 83 percent to HK$9.49 billion.
The metals producer is turning into a supplier of oil to capitalize on rising energy demand from the world's fastest-growing major economy.
Citic Resources bought a Kazakhstan oil field from its parent last year, adding to output in Indonesia where the Chinese government-backed company acquired its first energy asset in 2006.
Crude production at the Kazakhstan field is targeted to rise 13 percent this year. Output will climb to 40,000 barrels a day this year from 35,500 barrels a day in 2007, Chief Executive Officer Sun Xinguo said on June 2.
The Karazhanbas field in western Kazakhstan holds an estimated 363.8 million barrels of oil reserves. The company also has a 51-percent stake in the Non-Bula Block in Indonesia's Maluku province. Crude prices, currently 27 percent higher than a year earlier, reached a record of US$147.27 a barrel on July 11, Bloomberg News said.
Citic Resources also increased its stake in Macarthur Coal Ltd to more than 20 percent, becoming the coal producer's biggest shareholder, Macarthur said in July. Supply constraints and rising Asian demand boosted prices of power-station coal at Australia's Newcastle port, the world's biggest harbor exporting the fuel, to all-time highs.
This year's contract price, which rose 125 percent to a record US$125 a ton, may increase 36 percent to US$170 next year, Merrill Lynch & Co said in a September 5 report. Prices at the New South Wales port were at US$161.35 a ton in the week ended September 5, according to the global COAL NEWC Index.
Citic Resources said this month it plans to spin off its manganese unit to boost the capital it needs for expansion as the company focuses on its energy business. Its stake in Citic Dameng Holdings Ltd will drop to below 50 percent after the proposed listing, from 80 percent.
As much as US$800 million may be raised by selling shares in the manganese unit, the South China Morning Post said in April, citing people it didn't identify.
The shares of Citic Resources fell 70 percent this year, against a 30 percent slump in the Hang Seng Index.
(Shanghai Daily September 16, 2008)
