CIMC Enric has revealed its first half 2014 interim results, and cites natural gas as driving a promising market outlook both for the company and the wider energy equipment segment despite declines during the year to date.

The group recorded a turnover of RMB 4.813bn ($783m) for the first six months of the 2014 financial year ended 31st June 2014, a minor drop of 0.3% when compared with RMB 4.828bn of the same period in 2013.

Gross profit also dropped 8.3% from RMB 976.2m for the first six months of 2013 to RMB 895.3m for the same period of 2014. However, profit attributable to equity shareholders has increased 8.8% to RMB 508m from RMB 467m for the same reporting period.

The CIMC Enric Group has three business segments: energy equipment, chemical equipment, and liquid food equipment. During first half 2014, the revenue generated by the energy equipment segment declined by 7.4% to RMB 2.335bn compared to RMB 2.521bn for the corresponding period in 2013. The group explained that it was because of slowdown in the demand for CNG equipment and on-vehicle LNG fuel tanks, which was in turn caused by a deceleration of the economic growth rate and natural gas price reform in China.

“Influenced by the Chinese macroeconomic situation and natural gas price reform, the energy equipment segment, which generates its revenue primarily from China, has recorded a decline in turnover in the first half of 2014,” said Mr. Zhao Qingsheng, Chairman of CIMC Enric.

Promise

On the bright side, the group believes that the demand for natural gas application equipment will resume continuous growth in the long-term.

Furthermore, China’s LNG vessel market will take off with a favourable subsidies policy announced in April 2014. The potential demand for on-board LNG fuel tanks, LNG refueling equipment for LNG vessels and related equipment present business opportunities for the group.

The International Energy Agency (IEA) projected the overall Chinese natural gas demand to be 315 bcm in 2019 – a near-doubling increase over 2013. The Chinese Government forecasted that the country’s natural gas consumption will reach 420 bcm by 2020.

Developing its own ability to offer turnkey engineering services is one of the important strategies of CIMC Enric; the group will step up its effort in exploring more turnkey projects and largely focus on the development of cryogenic tanks, refuelling station projects, small and medium scale liquefaction, petrochemical gas storage, gas processing projects, chemical spherical tanks and special vessels for nuclear energy.

The group announced in June that one of its subsidiaries Nanjing Yangzi Petrochemical Design & Engineering Co., Ltd has acted as the lead contract party for the provision of engineering, procurement and construction services in the Zhejiang Zhoushan LNG receiving and refilling station project.

Zhao concluded, “The group remains prudently optimistic about the outlook of the sectors it is engaged in. The group strives to become a world-leading manufacturer of specialised equipment and provider of related project engineering services in energy, chemical and liquid food industries. The group is well prepared to cope with the challenges ahead, grasp business opportunities and bring long-term returns to shareholders.”

Besides LNG storage tanks and vessels, the group is developing its expertise in other specialised areas.

Recently, after three years of hard work on its development, design and manufacture, a 300m3 liquid hydrogen storage tank was unveiled. The tank was manufactured by Sanctum, a subsidiary of the CIMC Enric Group, and will be delivered to Hainan in Southern China for a rocket launch project.

The company claimed that a liquid hydrogen storage tank of such a large size is the first in the Asia region and is also rare in Western developed nations.