Natural gas demand rebounds, PetroChina's profit hits a record high in 2023, planning to distribute a dividend of 42.1 billion | Financial Report Insights

Despite a year-on-year drop of about 18% in international oil prices last year, energy giant PetroChina (referred to as PetroChina below) delivered an outstanding performance in 2023, with profits hitting a historic high.

After the Hong Kong stock market closed on Monday, March 25, PetroChina announced its full-year performance for 2023. The financial report showed that PetroChina achieved revenue of 3.01 trillion yuan in 2023, a 7% year-on-year decrease, but the decline was much smaller than the drop in oil prices. Net profit attributable to the parent company's shareholders increased by 8.3% to 161.146 billion yuan, breaking the profit record of 149 billion yuan in 2022, representing an 8.3% year-on-year increase.

Post-epidemic domestic energy consumption rebound, PetroChina's natural gas division triples profits

The significant growth in the performance of the natural gas segment was the biggest highlight of PetroChina's performance in 2023.

Due to increased post-epidemic travel activities and factories returning to normal operations, fuel demand rebounded last year.

After experiencing the first decline in decades in 2022, China's natural gas consumption increased by 7.6% last year, which was a significant positive for PetroChina, which supplies the vast majority of natural gas in China. The company's natural gas business achieved a profit of 43 billion yuan for the full year, about 3.3 times that of 2022.

The strong performance of the natural gas business effectively offset the adverse impact of the decline in oil prices on the company's drilling and refining business profits. Due to the downward trend in international oil prices, PetroChina's average realized crude oil price last year decreased by 16.8% compared to 2022.

Last year's oil and gas equivalent production increased year-on-year, and will continue to grow this year

Despite pressure on energy prices, against the backdrop of energy security and structural transformation, PetroChina, as the largest oil and gas producer in China, will maintain a solid position. The company increased oil and gas production by intensifying exploration and development efforts during the reporting period.

In 2023, PetroChina's oil and gas equivalent production domestically and internationally reached 1759.2 million barrels, a 4.4% year-on-year increase. Crude oil production was 937.1 million barrels, with a daily output of 2.57 million barrels, a 3.4% increase over the previous year (906.2 million barrels). Natural gas production was 4.93 trillion cubic feet, a 5.5% year-on-year increase.

Last year, due to the strong recovery in gasoline and aviation fuel demand post-epidemic, PetroChina's refinery crude oil throughput increased by 15.3% to 1.3988 billion barrels, equivalent to 3.83 million barrels per day, reversing the 1% decline from the previous year.

According to a recent annual outlook report released by PetroChina's official research institute, due to a surge in passenger traffic, China's aviation fuel consumption may increase by 13.1% this year, while diesel consumption may decrease by 1.8%.

Looking ahead, PetroChina expects crude oil production to decrease by 3% this year, to 909.2 million barrels. Natural gas production is expected to increase by 4% to reach 5.14 trillion cubic feet. PetroChina also forecasts a 0.3% increase in refinery production this year In addition, PetroChina is also accelerating its transformation into a clean energy supplier. During the reporting period, the company focused on promoting the construction of four major new energy bases in Qinghai, Xinjiang, Inner Mongolia, and Songliao, increasing the layout of green projects such as wind power, photovoltaics, geothermal, and hydrogen energy, and improving the conversion and grid connection capabilities of clean electricity.

For its traditional oil and gas business, PetroChina plans to continue improving the efficiency of domestic and foreign oil and gas resource development to maintain domestic supply capabilities. In the field of new energy, the company will continue to promote business transformation and upgrading around the strategic goals of building gas-electric integration and clean energy suppliers.

The company's capital expenditure budget for this year is 258 billion yuan, compared to 275 billion yuan last year.

In terms of cash flow, PetroChina's net cash flow from operating activities in 2023 was 456.6 billion yuan, a 16% increase year-on-year, with cash and cash equivalents of 249 billion yuan at the end of the period. The company has ample cash reserves, with its asset-liability situation continuing to improve and its debt ratio further decreasing.

PetroChina stated that it plans to distribute a year-end cash dividend of 0.23 yuan per share to all shareholders in 2023, with a total dividend amount of approximately 42.1 billion yuan