Union Gas conserving funds for expansion

Slowing of commercial LPG sales during lockdown cushioned by increase in sales to households; company has S$21m war chest for opportunities such as acquisition.

Published Sun, Jun 14, 2020 · 09:50 PM

Union Gas

STEADY growth in two of its three business segments over the past three years has put fuel retailer Union Gas Holdings in a strong position to weather the Covid-19 pandemic, and given it room to think about continued expansion and what its next big venture will be.

Revenue and net profits have more than doubled to S$78.8 million and S$8.4 million, respectively, since the company listed on the Catalist board in April 2017. Careful stewardship of its funds has allowed Union Gas to build up a war chest of S$21 million as at the end of 2019, with lease liabilities of just S$1.9 million. That is substantial when measured against its market capitalisation of S$60.7 million.

Much of the cash has come from its liquefied petroleum gas (LPG) retail business, which the company enlarged with two major acquisitions in 2018. Coupled with continued growth in its diesel business, Union Gas has been more than able to offset a decline in its compressed natural gas (CNG) segment and keep ea…