Fortune Oil boosted full-year earnings and dividends on the back of strong gains from its stake in Bluesky Aviation, together with a £7.3m one-off gains on disposals. But it's the strategic investments that have positioned the company to exploit changes now underway within China’s energy markets.
The headline fall in revenues - excluding Fortune's share of joint ventures - reflected lower natural gas sales as the group undertook a rationalisation of its gas interests, including the sale of its stake in Beijing Fu Hua Dadi Gas. However, a 14 per cent rise in Bluesky's fuel sales helped to boost the unit's net profits by a third and lift Fortune Oil's operating profits by 11 per cent to £27.4m. During the year, Bluesky, in partnership with China National Aviation Fuels, secured a deal to the supply fuel needs of 15 new airports in China.
Despite the non-core gas sales, Fortune launched four new city gas projects, whilst reporting a 16 per cent rise in the number of its domestic gas customers in 2011. And since the year-end it has built a strategic 11 per cent stake in Hong Kong-listed China Gas Holdings - the largest national supplier.
Oriel Securities forecasts 2012 EPS of 1p (2011: 0.96p) although it's worth noting that 2011 EPS earnings were signifcantly ahead of the beroker's estimates.
| FORTUNE OIL (FTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 12.25p | MARKET VALUE: | £243m | |
| TOUCH: | 12-12.25p | 12-MONTH HIGH: | 14.75p | LOW: 9p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 7p* | NET DEBT: | 3% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 73.0 | 8.8 | 0.25 | nil |
| 2008 | 132 | 15.7 | 0.49 | nil |
| 2009 | 192 | 18.1 | 0.47 | nil |
| 2010 | 276 | 26.1 | 0.69 | 0.13 |
| 2011 | 200 | 31.7 | 0.96 | 0.18 |
| % change | -28 | +21 | +39 | +38 |
Ex-div:23 May Payment:27 Jun *Includes intangible assets of £49.7m, or 2.5p a share | ||||
