Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2011 Earnings Presentation
37 slides from Enn Energy's earnings presentation, Aug 29, 2011
Slide 1: 2011 Interim Results Analyst Presentation
2011 Interim Results Analyst Presentation 29th August, 2011
Slide 2: Contents
2 Contents 1. Financial Highlights 2. Business Review 3. New Projects 4. Appendix
Slide 3: Financial Highlights
3 Financial Highlights 1H2010 (RMB'000) 1H2011 (Restated) Change Revenue 7,202,237 5,043,719 42.8% Gross Profit 1,891,249 1,421,128 33.1% EBIT 1,324,170 930,600 42.3% EBITDA 1,578,483 1,159,547 36.1% Profit attributable to owners of 628,835 533,761 17.8% the Company EPS - Basic (RMB cents) 59.88 50.
Slide 4: Dividend Policy
4 Dividend Policy The Board of Directors has resolved not to recommend payment of an interim dividend for 2011. Our dividend policy: – More subsidiaries have stepped into the mature stage. – The Group will balance the development of business and financial position to decide the dividend payout r
Slide 5: Revenue Breakdown 1H2011
5 Revenue Breakdown 1H2011 2010 4.7% 21.9% 8.0% 4.5% 23.5% 8.1% 10.8% 2.1% 10.3% 1.4% 51.1% 53.6% 2009 9.5% 1.0% 30.4% 48.5% Operating Segment 2011 (RMB’000) 2010 (RMB’000) Change % 10.7% Gas connection 1,580,137 1,135,882 39.1% Connec t ion f ees Sales of piped gas 3,863,147 2,651,542 45.7% B ot t
Slide 6: Analysis of Piped Gas Sales
6 Analysis of Piped Gas Sales Natural gas is our primary gas sales. The sales revenue of natural gas accounted for 95.7% of the total sales of piped gas. We expect all other piped gas users will be converted to piped natural gas users. Volume Revenue 0.1% 0.4% 8.1% 0.1% 3.7% 0.2% 91.7% 95.7% N
Slide 7: A Balanced Portfolio of Customers (by revenue)
7 A Balanced Portfolio of Customers (by revenue) Residential customers Gas refuelling stations Commercial / Industrial “C/I” customers Wholesale of gas 1H2011 2010 2009 Gas Connection Sales of piped gas, vehicle gas and wholesale gas 15.2% 13.2% 16.0% 17.7% 12.5% 14.9% 5.0% 4.9% 66.6% 66.6% 67.4%
Slide 8: Margins Analysis
8 Margins Analysis During the Period, the overall gross profit margin and net profit margin declined compared with the same period of 2010. Gross profit margin Net profit margin 26.9% (1H2010: 28.2%) 12.5% (1H2010: 13.8%) Reasons for change Gross profit margin: 1. The continuous improvement in the
Slide 9: Financial Resources and Liquidity
9 Financial Resources and Liquidity (RMB million) 1H2011 1H2010 (Restated) Change Cash on hand 5,657.1 2,491.0 127.1% A/R Days 15 16 (1 days) Total Debts 9,838.6 6,332.2 55.4% - Short-term loans 2,085.5 2,120.0 -1.6% - Long-term loans 2,965.0 2,865.6 3.5% - 7- year bonds 0 1,346.6 -100.0% - 10-year
Slide 10: Refinancing Plan
10 Refinancing Plan As of 30 June 2011 (RMB million) Refinancing Plan Total Debt 9,838.6 • We have RMB5.66 billion cash on hand while our working capital demand RMB600-700 million cash only, leading to a surplus cash of RMB4.96 billion. Short-term loans: • We have RMB3.78 billion committed undrawn b
Slide 11: CAPEX
11 CAPEX RMB million 2500 100 Injected by the JV partners 243 when the project companies 424 2000 19 were formed. 156 1500 44 25 2098 1000 1687 1694 1416 1282 1022 980 500 0 2005 2006 2007 2008 2009 2010 1H2011 CAPEX for 2011 is estimated at RMB 2.0 billion, and the proportion injected by JV partn
Slide 12: Contents
12 Contents 1. Financial Highlights 2. Business Review 3. New Projects 4. Appendix
Slide 13: Key Operational Data
13 Key Operational Data 1H2011 1H2010 Change Coverage & Gas Penetration Rates of PRC projects Connectable urban population coverage ('000) 49,135 45,663 7.6% Connectable households coverage ('000) 16,378 15,221 7.6% Natural gas penetration rate 36.3% 32.6% 3.7% Piped gas (including natural gas) pene
Slide 14: Key Operational Data
14 Key Operational Data 1H2011 1H2010 Change Pipelines & Stations Length of intermediate & main pipelines (km) 17,264 15,537 11.1% Natural gas processing stations 103 95 8 Combined daily capacity of natural gas processing 24,818 22,713 9.3% stations ('000 m³) Vehicle gas refuelling stations 203 176
Slide 15: Gas Sources
15 Gas Sources To accommodate the anticipated fast-growing demand for natural gas, the Group has several ways to secure gas Take-or-pay contracts sources: Annual Supply in Pipelines 1. Take-or-pay contracts 2011 ( mil m3) Signed 15-25 years take-or-pay contracts with West-East Pipelines I 780 vari
Slide 16: Gas Sources
16 Gas Sources The phase-by-phase completion and commencement of operation of pipelines Pipelines Designed capacity (bil m3/yr) Operation schedule West-East Pipeline II 40 Full operation in 2011 Sichuan-East Pipeline 12 Full operation since 2010 More and more LNG receiving terminals will be put
Slide 17: Gas sources – Upstream projects
17 Gas sources – Upstream projects The Group has invested in various upstream projects to ensure secured gas sources in long run and to provide clean energy variety to ensure continuous business growth – Import and export rights of LNG and other kinds of energy – LNG plants • The group has 3 LNG p
Slide 18: Vehicle Gas Refuelling Stations
18 Vehicle Gas Refuelling Stations Gas emission from vehicles is one of the major causes of pollution, natural gas is a much cheaper and more environmental friendly fuel than gasoline During the Period, 11 new vehicle refuelling stations were built and put into operation Vehicle natural gas sa
Slide 19: Contents
19 Contents 1. Financial Highlights 2. Business Review 3. New Projects 4. Appendix
Slide 20: Project Development
20 Project Development Connectable We have one overseas project in Vietnam Province City / County Urban Population covering cities of Hanoi, Hochiminh and China: Danang, total connectable urban population Hunan Yongzhou 600,000 amounts to 8,920,000 Hunan Wangcheng County 150,000 Ningxiang County
Slide 21: Project Development – The PRC
21 Project Development – The PRC Ningxiang County Project Yongzhou City Wangcheng County Development Zone, Jinzhou Hongze County Hi-tech Zone Province Hunan Hunan Hunan Jiangsu Connectable 600,000 150,000 30,000 400,000 Population Equity stakes of 100% 55% 55% 90% Xinao Gas Administrative Dingzi Tow
Slide 22: Project Development – The PRC
22 Project Development – The PRC Kuming City Hi-tech Project Anxi County Rongcheng County Linghai City Zone Province Fujian Hebei Yunnan Liaoning Connectable 120,000 70,000 40,000 20,000 Population Equity stakes of 60% 100% 50% 80% Xinao Gas Operational Location Administrative Region Administrative
Slide 23: Project Development – The PRC
23 Project Development – The PRC Yancheng Environemental Guiping Industrial Park, Project Protection Industrial Park Guigang City Province Jiangsu Guangxi Connectable N/A N/A Population Equity stakes of 100% 100% Xinao Gas Operational Location Industrial Park Industrial Park Registered Capital HKD20
Slide 24: Operational Locations
24 Operational Locations Inner Mongolia (1 project) China 763,000 Liaoning (3 projects) 631,000 Hebei (5 projects) 3,179,000 Existing Connectable Beijing Municipality (3 projects) 530,000 Urban Population: Offshore gas project – 56,355,000 Vietnam Henan (6 projects) Shangdong (11 projects) 5,107,0
Slide 25: Operational Locations
25 Operational Locations Anhui (9 projects) Guangdong (cont’d) Henan (6 projects) Jiangsu (10 projects) Yunnan (2 projects) 14. Bengbu 925,000 37. Dongguan 6,950,000 24. Xinxiang 1,049,000 25. Xinghua 181,000 81. Wenshan 252,000 21. Chuzhou 269,000 47. Zhanjiang 652,000 40. Kaifeng 848,000 32. Wujin
Slide 26: Q&A
26 Q&A
Slide 27: Contents
27 Contents 1. Financial Highlights 2. Business Review 3. New Projects 4. Appendix
Slide 28: ENN Energy – A Leader in the Industry
ENN Energy – 28 A Leader in the Industry ENN Energy (formerly known as Xinao Gas) is one of the first privately- owned clean energy distributor in the PRC. It was founded by Mr. Wang Yusuo and Ms. Zhao Baoju in 1993. In 1998, the Chinese government promoted the use of natural gas and encouraged
Slide 29: Gas Delivery Process
Gas Delivery Process Residential households Notes: (1) Gas delivery using either intermediate pipelines or CNG or LNG trucks. (2) Customers’ pipelines and metres which are not owned by the Group are within the customers' premises and are not highlighted in this diagram.
Slide 30: Immediate Revenue Inflow Upon Connection
30 Immediate Revenue Inflow Upon Connection Revenue / Cost Simplified model for a typical matured project Year 1 Year 3 Year 5 Year 7 Year 9 Year 11 Total Revenue Gas usage fee Connection fee Capex Free cash flow Connection fee dominates in early years when the project companies are signing up new
Slide 31: Connection Fee Amortisation (8 projects)
31 Connection Fee Amortisation (8 projects) As of December, 2010, 8 projects have adopted amortisation method. (Xiangtan, Changsha, Zhuzhou, Rizhao, Huaian, Lianyungang, Xinxiang, Fengyang) Part of the connection fee income will now be amortised over the concession period instead of one-off reco
Slide 32: Natural gas Price Reform
32 Natural gas Price Reform Objectives Further liberalise the natural gas market Narrow down the difference between gas tariff in the PRC and the international market Enhance the ability of importing LNG from overseas to further promote the utilisation of natural gas Content Raise the onshor
Slide 33: Approximate conversion factors
33 Approximate conversion factors To billion cubic trillion British billion cubic million tonnes million tonnes million barrels Natural gas and LNG meters thermal feet NG oil equivalent LNG oil equivalent NG units From Multiply by 1 billion cubic meters NG 1 35.30 0.90 0.73 36.00 6.29 1 billion cubi
Slide 34: Major Long Distance Pipelines in China
34 Major Long Distance Pipelines in China 332 Source: ENN Energy
Slide 35: Awards from International Media and Organisations
Awards from International 35 Media and Organisations “Best Small Cap Company (China)” for AsiaMoney Yazhou Zhoukan “1000 Global Chinese Enterprise” for 2007 2001, 2002, 2003 “Overall Best Managed Company “Chinese Business 500” for 2001, 2002, 2003, 2004, (China)” for 2001, 2003 2005, 2006 “Overall B
Slide 36: ENN Energy – Share Price Performance
ENN Energy – 36 Share Price Performance 2,500 2,000 ENN Energy 1,500 Hang Seng China Enterprise Index 1,000 500 Hang Seng Index - ENN Energy Hang Seng Index Hang Seng China Enterprise Index
Slide 37: Disclaimer
37 Disclaimer The information provided to you in this presentation does not constitute or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities of ENN Energy Holdings Limited (the "Company") nor shall it form the basis of, nor can