ENN EC Operating Income Exceeded RMB 10 Billion after Structural Transformation and Strategic Layout(600803)
(March 30, 2018, Beijing, China) - ENN Ecological Holdings Co., Ltd. (“ENN EC”, SH 600803) released its 2017 annual reports today, with operating revenue up to RMB 10 billion first.and successfully entering the ranks of enterprises in “Ten Billion Club” in the clean energy field. Its strategic transformation has entered a critical period.
The report shows that, thanks to the steady progress of the clean energy industry layout of listed companies, ENN EC realized operating income of RMB 10.036 billion in 2017, up 56.91% over the same period last year. The net profit of shareholders belonging to listed companies was 631 million yuan, up 21.65% year on year. If the non-cash impairment of Santos in the middle of the year is not taken into account, the Company’s actual profit has exceeded 1 billion yuan. Among them, Santos operating performance improved significantly in 2017, with strong operating performance of all core assets, achieving the optimal performance since the fall in oil prices in 2014. The basic profit after deducting non-cash impairment reached USD 336 million. At the same time, domestic natural gas engineering revenue also reached a record high, with an increase of 38.21%.
Figure 1: Proportion of ENN EC Main Business Income in 2017 (%)
Figure 2: Income Growth of ENN EC Sectors in 2017 (RMB 10,000)
In Shell’s latest annual report on LNG prospect, it is pointed out that the strong LNG market fundamentals will surpass expectations in 2017. As the world’s second largest LNG importer, China needs more investment in LNG upstream projects to meet long-term demand growth. However, ENN EC insists on “becoming an influential clean energy product provider and clean energy technology service provider”, and adheres to the strategic development direction of expanding and strengthening the clean energy industry chain, which is in line with this trend. In 2016, the Company has become the largest shareholder of Santos after taking a key step in the internationalization of the clean energy industry through its acquisition of Santos. As an important cooperator of Santos in clean energy fields such as LNG in the international field, ENN EC actively explores and attempts to carry out overseas LNG trade with Santos. In the future, it is expected to obtain overseas high-quality natural gas through bilateral cooperation, expand the supply of natural gas resources, and meet the needs of domestic energy market and domestic and international LNG trade.
The report also predicts that the proportion of oil and natural gas will change from 50% to 25% in the future and 75% in the future. LNG, as a more flexible form of natural gas supply, will also play a more important role in the future. Through the strategic cooperation with Santos, ENN EC has already taken the lead in Australia and Papua New Guinea, which are the most important natural gas sources in the world, and has the conditions to continue to go further upstream.
In addition to the strategic new sector, ENN EC has also achieved unprecedented historical success in the traditional business sector. The coal, energy, chemical and biopharmaceutical sectors achieved 130.81%, 73.36% and 18.06% growth, respectively. These remarkable performances not only reflect ENN EC’s leading advantages in operation over the years, but also support the Company’s operating performance, broaden the space for the Company’s strategic transformation and lay a solid foundation for progress.
Yu Jianchao, CEO of ENN EC, said: “In 2017, the global economic recovery exceeded expectations, and China’s supply-side structural reforms have steadily advanced, creating very good external conditions for our development. Under the strategy of resolute transformation, in order to meet the opportunities and challenges, the Company has made major adjustments to its organizational structure and industrial structure, continuously deepened the upgrading of clean energy industry, adhered to the “safe, green, intelligent and innovative” development mode, intensified the development of clean energy technology service market, grasped the pace of production and operation and the project construction, firmly grasped the management of reducing costs and tapping potentials, concentrated internal superior resources, explored the establishment of data platforms, and continuously improved management efficiency. In 2017, the Board of Directors is pleased with the Company’s performance and hopes that the management and all business partners will march forward in 2018 in Do not forget your initiative mind. It is required to grasp the development opportunity of clean energy market, strengthen strategic direction, expand industrial distribution, cooperate with global resources, provide services for China’s industrial upgrading, create greater glory for the Company and create greater value for shareholders.”