Union Gas shares gain 9% after H1 earnings climb 76.7% on LPG sales

UNION Gas Holdings on Thursday posted a 76.7 per cent surge in net profit to S$7 million for the half year ended June 30, 2020 from S$4 million a year ago, led by its retail liquefied petroleum gas (LPG) business.

As at 1.03pm on Thursday, shares in the fuel retailer were trading at 36.5 Singapore cents, up three cents or 9 per cent.

Earnings per share came in at 3.05 Singapore cents for the six-month period, up from 1.73 cents a year earlier.

Revenue for H1 2020 grew 27.2 per cent to S$43.2 million, from S$34 million last year.

This was mainly due to its retail LPG segment, which benefited from higher demand from domestic households as there was more home cooking during the "circuit-breaker" period, as well as more business from its commercial customers, the company said.

Nonetheless, this was partially offset by a decrease in revenue from its other two business segments, namely diesel and compressed natural gas.

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An interim dividend of 0.5 Singapore cent per share was declared for the half year, up from 0.3 cent a year ago. The date payable and the record date for the dividend will be announced at a later date, the firm said.

In June this year, The Business Times reported that Union Gas is in a strong position to weather the Covid-19 pandemic, and that it is conserving funds for expansion, with a S$21 million war chest available for opportunities such as acquisitions.

The Catalist-listed firm has inked a non-binding memorandum of understanding with substantial shareholder Union Energy Corp to purhcase its LPG distribution, bottling and storage businesses.