HK's Zhonghua Sees Earnings Slump in Q1

Hong Kong-listed LNG supplier and energy services provider Zhonghua Gas reported a 29.5% yr/yr drop in revenues in the first quarter to HK$113.5mn ($14.6mn), blaming the decline on the impact of the Covid-19 pandemic.

Net profit plunged 76.1% at HK2.88mn, while core earnings (Ebitda) fell 61.1% to HK$10.6mn, it said in a report published on May 12.

"The decrease in revenue was mainly caused by the outbreak of Covid-19 which led to the imposition of various travel and work restrictions by the relevant government administrations which unavoidably caused serious impact on the Group's normal business operations such as client meetings, contract negotiation and progresses on the completion of new projects," the company said.  "As a result, the only source of revenue earned for the first three months of this year was from the supply of LNG that has a thinner gross profit margin than that of construction related and consultancy works."

Zhonghua noted that the 60:40 joint venture (JV) it set up with Shanghai Jiulian Group enabled it to secure stable supply of LNG and expand its business in the Yangtze River Delta region of China. The JV will mainly engage in LNG sales, LNG pipeline engineering, delivering LNG equipment, technology development, consulting and transfer of heating systems and developing new energy technologies.