PetroChina Shares Rise After It Posts Higher Profit, Revenue as Oil Prices Gain — Update

By Tracy Qu and Kimberley Kao

Shares of PetroChina rose after China's largest oil-and-gas company posted higher profit and revenue for the first six months of the year, buoyed by stronger oil prices.

The energy major's Hong-Kong listed shares rose as much as 4.5% early on Tuesday, and were 3.9% higher at the midday break, outperforming the benchmark Hang Seng Index which was 0.3% lower.

PetroChina, the listed arm of state-owned China National Petroleum Corp., said late Monday that its net profit rose 3.9% on the year to 88.61 billion yuan for the six months ended June 30, equivalent to $12.44 billion.

Revenue climbed 5.0% to 1.55 trillion yuan for the half.

"Operating profitability achieved steady growth and another record high," PetroChina said.

The Chinese oil company declared an interim dividend of CNY0.22 a share for the first half, which it said marks a third straight year of a record-high dividend.

PetroChina attributed the rise in revenue primarily to higher sale prices for crude oil and gasoline. The recovery of demand alongside tight supply in global oil markets, coupled with the impact of geopolitics, helped drive oil prices up during the period, PetroChina said in a filing. The group's average realized price per ton of crude oil rose 8.1% in the six-month period.

Sales volumes of aviation kerosene increased 16% during the half, tracking the recovery in Chinese outbound travel, while natural gas sales grew 13%.

At home, PetroChina noted a slowdown in domestic demand for refined oil products "due to the competition impact of alternative energy" but continued rapid growth in demand for natural gas.

Diesel sales volume fell 5.6%, while gasoline sales dropped 2.7%.

Citi research analysts think there is room for a further dividend hike or for share buybacks, thanks to PetroChina's healthy free cash-flow generation, they wrote in a note. PetroChina's acquisition of CNPC Electric Energy, which it also announced Monday, could help it diversify into the power segment and into green energy, they added.

The acquisition is priced at a consideration of CNY5.98 billion, PetroChina said. CNPC Electric Energy mainly focuses on businesses in electric power technology, sales and construction.

The deal looks expensive to Macquarie research analysts, who said in a note that since the acquisition didn't require shareholder approval, it could also potentially raise corporate governance concerns among investors.

Over the weekend, another major oil company, China Petroleum & Chemical Corp., reported a rise in its first-half net profit but a drop in revenue due to a decline in demand for diesel.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

August 27, 2024 01:10 ET (05:10 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.