Chinese energy giant
PetroChina Co. Ltd.
) announced its first half 2013 earnings of RMB 65.5 billion or
RMB 0.36 per diluted share, compared with RMB 62.0 billion or RMB
0.34 per diluted share a year earlier. Earnings per ADR came in
at $5.71 (exchange rate: US$1.00 = RMB 6.3, 1 ADR = 100 shares).
PetroChina's total revenue for the six months increased 5.2% from
the year-earlier period to RMB 1,101.1 billion.
The improvement can be primarily attributable to higher oil and
gas equivalent output, and outstanding operating performance of
the Natural Gas & Pipelines unit.
PetroChina posted strong upstream output growth during the six
months ended Jun 30, 2013. It is the world's biggest listed oil
producer by volume followed by
Exxon Mobil Corp.
). Crude oil output - accounting for 66.6% of the total - rose
2.6% from the year-ago period to 464.2 million barrels (MMBbl),
while marketable natural gas output was up 8.1% to 1,397.5
billion cubic feet (Bcf).
Average realized crude oil price during the first six months of
2013 decreased by 6.9% to $100.49 per barrel, as compared to the
year-ago period of $107.98 per barrel. Moreover, the operating
expenses for this unit were recorded at RMB 286.7 billion,
representing a hike of 2.9%, as compared with the year ago
period. These lowered the upstream (or exploration &
production) segment's profit by 13.2% to RMB 98.8 billion.
The Beijing-based company's 'Refining & Chemicals' business
registered an operating loss of RMB 15.9 billion, considerably
narrower than the year-earlier period's loss of RMB 28.9 billion.
This was mainly possible due to PetroChina's ability to take
advantage of the market-friendly fuel pricing policy along with
lower operating expenses.
PetroChina's refinery division processed 499.0 MMBbl during the
six-month period, up from 489.7 MMBbl in 2012. The company
produced 3.357 million tons of synthetic resin in the period (a
rise of 14.3% year over year), besides manufacturing 2.060
million tons of ethylene (up 17.0%). It also produced 45.139
million tons of gasoline, diesel and kerosene during the period,
as against 43.826 million tons a year ago.
Natural Gas & Pipelines:
Due to a significant decrease in operating expenses and
controlled transmission cost of the pipeline, PetroChina's
natural gas business incurred a profit of RMB 21.9 billion during
the first six months, up by a whopping 1,268.75% from the
year-earlier level of RMB 1.6 billion.
Additionally, sales for this segment was reported at RMB 105.6
billion, representing an increase of 7.7% from RMB 98.1 billion,
recorded in the year ago period.
In marketing operations, the state-owned group sold 79.39 million
tons of gasoline, diesel and kerosene during Jan-Jun 2013, a hike
of 8.7% year over year. However, owing to refined products' lower
demand and increased operating expenses, the segment's earnings
fell 65.7% year over year to RMB 3.4 billion.
Liquidity & Capital Expenditure
DRIL-QUIP INC (DRQ): Free Stock Analysis
POWERSECURE INT (POWR): Free Stock Analysis
PETROCHINA ADR (PTR): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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As of Jun 30, 2013, PetroChina's cash balance was RMB 150.1
billion, while net cash flow from operating activities was RMB
102.1 billion. Capital expenditure for the period reached RMB
108.2 billion, down 3.1% from the year-ago level.
PetroChina currently carries a Zacks Rank #1 (Strong Buy),
implying that it is expected to significantly outperform the
broader U.S. equity market over the next one to three months.
Apart from PetroChina one can have a look at oil field machinery
and equipment suppliers like
PowerSecure International Inc.
) that offer value. Dril-Quip retains a Zacks Rank #1 (Strong
Buy), while PowerSecure International sports a Zacks Rank #2