【Breaking News】Perennial Energy Announces Annual Results for the Year Ended 31 December 2020 Significant Revenue Increase of 72.7% to Approximately RMB1,402.6 Million With Increased Annual Production Capacity to 1,650,000 Tonnes in Total
(Hong Kong, 26 March 2020)— Perennial Energy Holdings Limited (“the Company”, together with its subsidiaries collectively known as “the Group”) (Stock Code: 2798.HK) announces the annual results for the year ended 31 December 2020 (“the Year”). During the Year, the Group recorded a total revenue of approximately RMB1,402.6 million (2019: approximately RMB812.1 million) from the production and sales of clean coal, middling coal, sludge coal, raw coal and coalbed methane gas as well as coal product trading, representing an increase in approximately 72.7% from the year ended 31 December 2019 (“Last Year”). The Group recorded a significant increase in its gross profit from approximately RMB422.8 million for Last Year to approximately RMB716.0 million for the Year, representing an increase of approximately 69.3%, which is in line with the increase in revenue. The Group recorded a net profit of approximately RMB345.5 million and a net profit margin of approximately 24.6% for the Year (2019: approximately RMB218.0 million and 26.8%), representing a significant increase of approximately 58.5% in net profit and a mild 2.2% decrease in net profit margin from Last Year. The increase in net profit was in line with the rise in sales revenue whereas net profit margin decreased mainly due to the fair value loss of approximately RMB16.1 million arising from fair value change of contingent consideration payables on the profit guarantee for the Year. Excluding its impact, net profit would be approximately RMB361.6 million for the Year (2019: approximately RMB218.0 million), representing an increase of approximately 65.8% from Last Year. The board proposed to declare a final dividend of HK3.75 cents per share for the Year (2019: HK2.5 cents per share).
Mr. Yu Bangping, Chairman, Executive Director and CEO of the Group said: “Amid the COVID-19 pandemic, the Group had to reduce the scale of its coal mining production activities temporarily in January 2020. Yet, mining production activities have then ramped up since early February 2020 after situation stabilised. Since the completion of the acquisition of the Xiejiahegou Coal Mine and enhancement in the annual production capacity of two existing coal mines, our sales volume and revenue have grown significantly.”
For the Year, the Group’s sales revenue of clean coal produced from its coal mines increased by approximately 67.0% to approximately RMB1,208.3 million (2019: approximately RMB723.4 million), sales revenue of middling coal increased by approximately 8.1% to approximately RMB90.2 million (2019: approximately RMB83.4 million), sales revenue of sludge coal reduced by approximately 83.3% to approximately RMB0.5 million (2019: approximately RMB2.8 million), sales revenue of coalbed methane gas increased by approximately 1.1% to approximately RMB2.6 million (2019: approximately RMB2.5 million). The increase of total revenue for the Year was attributable to the significant growth in the sales of clean coal, as a result of the increased permitted annual production capacity of the Hongguo Coal Mine and Baogushan Coal Mine, as well as the completion of the acquisition of the Xiejiahegou Coal Mine.
For the Year, the sales volume of clean coal internally produced from its coal mines increased significantly by approximately 72.9% to approximately 1,014,902 tonnes (2019: approximately 587,016 tonnes), the sales volume of clean coal purchased externally increased to approximately 82,439 tonnes (2019: nil), the sales volume of middling coal increased by approximately 18.0% to approximately 275,120 tonnes (2019: approximately 233,200 tonnes), and the sales volume of sludge coal decreased by approximately 72.4% to approximately 5,595 tonnes (2019: approximately 20,270 tonnes).
In terms of selling price, during the Year, the average selling price of clean coal internally produced from its coal mines decreased to approximately RMB1,190.55 per tonne (2019: approximately RMB1,232.28 per tonne), the average selling price of clean coal purchased externally amounted to approximately RMB 1,210.00 per tonnes (2019: nil), the average selling price of middling coal also decreased to approximately RMB327.85 per tonne (2019: approximately RMB357.78 per tonne), and the average selling price of sludge coal decreased to approximately RMB84.18 per tonne (2019: approximately RMB139.12 per tonne).
During the Year, the Group owns and operates three underground coal mines in Panzhou City, Guizhou Province, namely Hongguo Coal Mine, Baogushan Coal Mine, and Xiejiahegou Coal Mine. The mining rights of these coal mines are fully-owned by the Group. Each of the Hongguo Coal Mine and Baogushan Coal Mine has a permitted annual capacity of 600,000 tonnes, whereas the Xiejiahegou Coal Mine has a permitted annual capacity of 450,000 tonnes.
On 9 December 2020, Guizhou Jiutai Bangda Energy Development Co., Ltd. 貴州久泰邦達能源開發有限公司 ( the “Purchaser”), an indirectly wholly-owned subsidiary of the Company, and an independent third party (the “Seller”) entered into a closure quota transfer agreement in respect of the production quota of Guizhou Chinalco Hengtaihe Mining Co., Ltd. Shuicheng County Panlong Township Panlong Coal Mine (貴州中鋁恒泰合礦業有限公司水城縣蟠龍鄉蟠龍煤礦, English name for identification purposes only), pursuant to which the Seller has agreed to sell and the Purchaser has agreed to acquire, the 900,000 tonnes/year closure quota of the Panlong Coal Mine in Shuicheng County (水城縣蟠龍鄉蟠龍煤礦, English name for identification purposes only) at a total consideration of RMB72,000,000.00 (tax inclusive). It is intended the permitted annual production capacity of the Hongguo Coal Mine to expand from 600,000 tonnes to 1.2 million tonnes and the Baogushan Coal Mine from 600,000 tonnes to 900,000 tonnes.
Mr. Yu Bangping, Chairman, Executive Director and CEO of the Group concluded, “China is believed to implement policies which will favour the businesses with an edge in technology and scale in the industry. We will continue our focus on production capacity enhancement and operational advancement. For example, our recent acquisition of closure quota and subsequent expansion are expected to support the Group to drive for better results.”
About Perennial Energy Holdings Limited (Stock Code: 2798.HK)
Perennial Energy Holdings Limited is a coal mining company based in Guizhou Province, the PRC and currently operates three underground coal mines in Panzhou City, Guizhou Province, namely, the Hongguo Coal Mine, the Baogushan Coal Mine and the Xiejiahegou Coal Mine. The Group employs mechanized longwall retreating underground mining method to extract raw coal which are mostly produced into 1/3 coking coal from the Hongguo Mine and Baogushan Coal Mine and coking coal from the Xiejiahegou Coal Mine.
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