Blue Sky Power Announces 2015 Interim Results

HONG KONG, Aug. 31, 2015 /PRNewswire/ --

Highlight

• Revenue increased 17.5% to approximately HK$90.7 million.
• Revenue and profit from sales of natural gas and other related products increased 99.5% and 1,181% to approximately HK$42.2 million and HK$40.8 million respectively.
• Loss attributable to owners of the Company narrowed to HK$3.5 million.

Financial Highlight

Blue Sky Power Holdings Limited ("Blue Sky Power" or "the Company", together with its subsidiaries, the "Group", HKSE stock code: 6828) announced its results and financial position for the six months ended 30 June 2015. During the reporting period, the Group's revenue increased 17.5% to approximately HK$90.7 million (corresponding period of 2014: HK$77.26 million) and loss attributable to owners of the Company narrowed to HK$3.5 million (corresponding period of 2014: HK$13.6 million).

Business Review

Revenue

Revenue increased by 17.5% from HK$77.3 million for HY2014 to HK$90.7 million for HY2015 which was mainly due to the expansion of natural gas business and recorded an increase of revenue from natural gas business by HK$21.1 million for HY2015, offset by the decrease in revenue of the printing business by HK$7.6 million due to the increased competition in the market.

Gross Profit/Loss and Segment Profit/Loss

The Group turned from the gross profit of HK$10.9 million for HY2014 to the gross loss of HK$4.2 million for HY2015 which was mainly due to (i) the amortisation expense of intangible assets of natural gas projects of HK$9.7 million; (ii) the natural gas projects were in the ramp-up stage in HY2015; and (iii) the decreasing gross profit margin of the printing business, including the increased labour costs in the PRC.

The natural gas business of the Group recorded a segment profit of HK$40.8 million during HY2015, which increased significantly from HK$3.2 million for HY2014, owing to the scale of operations of our natural gas projects starting to ramp up during HY2015 and the gain recognized on disposal of subsidiaries in HY2015. On the other hand, the printing business of the Group recorded a segment loss of HK$9.2 million during HY2015, as compared to a segment profit of HK$7.7 million during HY2014, due to the intense competition of the printing market during HY2015.

Future Prospects And Development

The Group is optimistic about the long term economic development in the PRC. There are a number favorable policies launched by the PRC government which will enhance the development of natural gas industry in the PRC, including but not limited to (i) urbanization plan; (ii) the proposal for energy conservation and environmental protection; and (iii) action plans for eliminating highly polluting coal-fired boilers and replacing with natural gas-fired boilers among high energy consumption industries. Therefore, it is expected that there will be escalating demand for natural gas in the PRC for industrial, transportation and residential uses and the Group will continue to benefit from the development of the natural gas industry in the PRC.

Looking ahead, the Group will continue to expand its footprints for the natural gas business in the PRC. Amid the recent crackdown of corruption and shake-up of the energy sector in the PRC and trimming of international oil prices, it creates a window of opportunities to acquire natural gas projects with more rooms for negotiation on deal pricing. The Group will spare no efforts to explore potential mergers and acquisition opportunities, which can enhance the market presence and financial return of the Group.

The Group also always strives to identify more potential low-cost natural gas sources. Recently, overseas LNG is on the downward price trend. In the PRC market, the imports of LNG has improved because the supply capacity and infrastructure of importing LNG is getting more available and up to date a total of 12 LNG terminals have been completed and launched for operation. Therefore, it is expected that utilizing imported LNG will be an important evolving trend in the natural gas market, especially the cities along the coastal areas. The Group is exploring the opportunities to invest in LNG receiving terminals in PRC and identify certain overseas LNG sources with competitive pricing to import low-cost LNG and tap into the business of LNG trading in the PRC and/or to supply the Group's own LNG refueling station. On 16 July 2015, the Company entered into an acquisition agreement to acquire Smart Rainbow Investments Limited, which will hold the 10% interest in a LNG receiving terminal in Haikou and will engage in the LNG trading business in the PRC. The Board believes that the abovementioned acquisition can facilitate the Group to tap into the LNG trading business in the PRC and also secure available overseas low-cost gas sources to be utilized in our own natural gas projects, which can further improve the profit margin.

Blue Sky Power Holdings Limited

Blue Sky Power Holdings Limited ventured into natural gas industry in the PRC in 2013 and has market presence for natural gas projects in Shandong, Jiangsu, Liaoning, Hubei, Hainan, Guizhou and Sichuan Provinces.