Brightoil Petroleum (Holdings) Limited, one of the largest service providers of marine bunkering in China, announced its annual results for the year ended 30 June 2009.
For the twelve months ended 30 June 2009, the turnover of the Group surged 131.5 times to HK$5,455 million. The gross profit was HK$538 million, up 14.8 times year on year. During the review period, profit attributable to shareholders increased by 3.2 times to HK$263.4 million. Basic profit per share was HK$20.6 cents. An annual dividend of HK$3.0 cents was declared for the review period.
Commenting on the results, Dr.
Sit Kwong Lam, Chairman and President of the Group, said, "This is the first annual results announced after the successful transformation of Brightoil Petroleum. After its transformation, the Group focused on the development of four core businesses, namely marine bunkering, oil storage and terminal facilities, marine transportation as well as oil and gas exploration and production. During the review period, the marine bunkering business delivered remarkable results which drove the Group to accomplish astonishing annual results.
"In the meantime, the Group is actively expanding into the global chain marine-bunkering business, laying a solid foundation for the Group's business development under the outstanding leadership of the Group's management."
After the acquisition by Energy Empire Investments Limited and Canada Foundation Limited in June 2008 and a subsequent transformation, the Group began its marine bunkering business and has delivered impressive results.
During the review period, the Group sold a total of 1.8 million tonnes of bunker fuel oil and achieved revenue of HK$5,445 million, which accounted for 99.8% of the Group's total revenue and was therefore a key revenue contributor. While the global shipping industry ebbed and bunker fuel oil prices fluctuated dramatically with crude oil prices during the review period, demand for the Group's marine bunkering services remained stable.
The shipping industry in China has been relatively buoyant, and the Group's clientele comprised primarily of international liners that continued to operate scheduled freight transportation to and from Chinese ports.
Brightoil Petroleum is the largest marine bunkering services enterprise in Shenzhen and its surrounding areas. During the review period, operations in Shenzhen maintained a positive momentum. At the same time, the Group actively strengthened and expanded marine bunkering operations in the Greater China region and overseas in order to enlarge its market share.
At the year end of 2008, the Group acquired a 7,100 DWT bunker barge,
"Brightoil 668" which commenced operations in
Hong Kong in April 2009, for a consideration of US$11.6 million.
Furthermore, the Group rolled out marine bunkering services in
Shanghai and
Ningbo in June this year as well as exploring business opportunities in China's other major ports, including
Zhoushan,
Qingdao,
Tianjin,
Guangzhou and
Xiamen. In addition, the Group has also been actively exploring the Singapore market.
The Group received an approval-in-principle from the Maritime and Port Authority of Singapore relating to its application for the
Singapore bunkering licenses in May 2009. It is now carrying out preparatory work and expects to start marine bunkering services in Singapore in November 2009.
With respect to the oil storage and terminal facilities business, during the review period, the Group formed a joint venture with Zhoushan Port Group Limited for the development of wharfs as well as the provision of related logistic services in
Zhoushan Port, Zhejiang Province. During the period, the Group acquired a land covering approximately 611,622 sqm. on Waidiao Island, Cengang Town, Dinghai District, Zhoushan City from Zhoushan Land and Resources Bureau with a plan to build storage, wharfs and ancillary facilities on the island.
The Group also entered into an agreement with the Dalian Changxing Island Harbour Industrial Zone Management Committee to develop oil storage facilities in
Changxing Island, Dalian. The storage capacity of the first phase facilities is about 3,000,000 to 4,000,000 m3 while the second phase facilities is about 4,000,000 to 5,000,000 m3.
In addition, the Group will also jointly work on an oil terminal project with an enterprise under the Committee. The Group expects this business to contribute a stable income.
During the review period, the Group has been actively preparing itself for developing into a leading energy conglomerate. The Group is contemplating the formation of a fleet that will consist of eight vessels including oil tankers and marine bunkers with sizes ranging from approximately 5,000 DWT to 300,000 DWT through leasing or hire-purchase arrangements, so as to support its business expansion and to provide oil transportation services to customers.
Dr Sit. said, "The global economy is expected to recover in the second half of 2009, resulting in the revival of international trade and shipping. We believe that the marine bunkering division will sustain growth as the global macro economic environment improves. The performance of the marine bunkering industry in the Asian markets like China and Singapore is set to stand out, providing a solid platform for the growth of the Group's marine bunkering operations."
The Group is in the view that relative to other developed ports in the world, China's marine bunkering sector is underdeveloped, and therefore has significant long-term growth potential. China's cargo throughput was 3.5 times that of Singapore in 2008, yet its annual bunker sales volume was a mere 4.8 million tonnes, equivalent to 16% of that of Singapore. With continual improvements in marine bunkering services and infrastructure at China's ports, the Group believes that the marine bunkering sector in China has tremendous growth potential.
For the long term development of its businesses, the Group has been exploring opportunities to expand upstream operations, including the exploration and production of oil and natural gas. A wholly-owned subsidiary of the Group,
Win Business Petroleum Grand Desert Limited, entered into an agreement with
China National Petroleum Corporation in August 2009 for the joint development and production of natural gas in Tuzi Block, the Tarim Basin, Xinjiang Province.
This block covers an area of 157.972 km2, and its proved geological reserves of natural gas are approximately 22.1 billion m3. The Group believes that this is an appropriate time to invest in the natural gas development project, given the upside potential of PRC natural gas prices in the near future. The joint venture allows the Group to make an important advance in diversifying into upstream businesses.
Dr Sit. concluded, "Riding on the strong foundation of its marine bunkering business, the Group will explore its upstream businesses with great endeavor. It is envisaged that the commencement of natural gas production and sale will bring enormous benefits to the Group. In the long run, the Group will establish itself as a leading energy conglomerate integrating both upstream and downstream operations and create higher value to its shareholders."
