Yanchang Petroleum International's Resilient 2024 Performance Amid Market Volatility

Yanchang Petroleum International Limited, a prominent player in the energy sector, recently announced its 2024 annual results, showcasing a resilient performance despite a challenging market environment. The company reported a 5% year-on-year (YoY) increase in revenue, reaching HK$29.18 billion, and a net profit of HK$55.6 million. This achievement is particularly noteworthy given the market's "tight balance and weak" trend, characterized by volatility in international oil prices, geopolitical risks, and financial market turbulence.



The company's success can be attributed to several strategic initiatives that focused on cost reduction, efficiency improvement, and technological innovation. In the upstream business, Novus Energy Inc., a subsidiary of Yanchang Petroleum International, implemented effective optimization measures for production. These measures included coordinating the production of new wells and controlling the decline in production from old wells. Additionally, Novus successfully drilled an exploration well under the Madison Group, which produced 5,000 barrels of oil equivalent (BoE) in six months, laying the foundation for further exploration and development.

In the downstream business, Henan Yanchang Petroleum Sales Co Ltd recorded a cumulative oil sales volume of 3,838,500 tonnes, with an operating revenue of RMB27.034 billion. This growth was driven by the expansion of the retail terminal business, securing 36 new major customers, and proactive expansion of sales channels in the railway channel sales, establishing long-term and stable cooperation with major enterprises.

The company's ability to hedge risks in the industrial chain also contributed to its revenue growth. For example, Novus benefited from the impairment recovery of oil and gas assets of CAD25,260,000, which helped it record a net profit of CAD11,600,000 despite a significant decrease in natural gas sales prices and sales prices of oil and gas mixtures.

In summary, Yanchang Petroleum International's 5% YoY revenue increase in 2024 was achieved through strategic initiatives such as cost reduction, efficiency improvement, technological innovation, market expansion, and risk hedging, which helped the company navigate market volatility and external challenges. The company's performance highlights its resilience and adaptability in a challenging market environment, positioning it well for future growth.