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Renaissance United issues Q3 result warning due to gas shortages
RENAISSANCE United said its third-quarter earnings, due to be released by March 17, will be impacted by a sharp increase in cost of sales due to the use of liquefied natural gas (LNG) during winter gas shortages in China.
Its China operations based in Hubei province had to supplement the company's piped gas supply with LNG, which is subject to market spot pricing, the group said in a bourse filing late on Friday night.
In December 2020, LNG prices in China peaked to three-year highs. Reuters reported that an early cold snap, post-lockdown manufacturing activity and a national drive away from coal were likely causes. The spike was exacerbated by dealers hogging imported fuel.
Renaissance United's China operations were not able to pass the increased supply prices to end-users as pricing is regulated by local governments.
The counter closed flat at 0.2 Singapore cent on Friday.