Yanchang Petroleum International Limited reported a sharp turnaround for the year ended 31 December 2025, moving from a HK$55.58 million profit in 2024 to a HK$782.39 million net loss. Performance was hit by lower commodity prices, weaker downstream demand in China and a HK$566.10 million impairment on Canadian oil & gas assets.
Revenue and Gross Profit • Consolidated revenue fell 41.0% to HK$17.33 billion. • Gross profit halved to HK$127.41 million; gross margin compressed to 0.74% (2024: 0.87%). • Upstream (Canada) sales declined 43.8% to HK$186.18 million on a 35.7% drop in production to 542,000 BOE and weaker WTI prices (average US$66/bbl versus US$77/bbl in 2024). • Downstream trading revenue in China contracted 40.6% to HK$17.14 billion as sales volumes fell 38% to 2.37 million tonnes.
Key Expense Movements • Net impairment charges totalled HK$624.25 million, comprising HK$548.93 million for petroleum and natural gas properties, HK$58.15 million on goodwill and intangibles, plus HK$17.17 million on other non-current assets. • Provision for expected credit loss increased to HK$52.20 million (2024: HK$5.68 million). • Depreciation, depletion and amortisation fell 22.5% to HK$126.58 million, reflecting lower production. • Administrative costs were trimmed 15.6% to HK$73.23 million through cost-control measures.
Segment Results • Exploration, exploitation & operation recorded a HK$68.04 million operating loss (2024: loss HK$4.30 million). • Supply & procurement posted a modest HK$1.72 million profit (2024: HK$5.08 million).
Balance Sheet and Liquidity • Total assets stood at HK$2.76 billion; equity shrank 55.3% to HK$0.56 billion. • Net current liabilities of HK$1.56 million replaced last year’s HK$56.88 million net current assets. • Cash and bank balances dropped 77.1% to HK$63.72 million. • Total borrowings (including lease liabilities) rose to HK$748.82 million; gearing ratio (total liabilities/total equity) surged to 375.5% (2024: 115.4%). • Management highlighted material uncertainty over going-concern status but is pursuing facility renewals and shareholder support; a US$35 million term loan renewal with the parent was approved in January 2026.
Operational Highlights • Novus Energy drilled 0.25 wells and spent CAD1.31 million in capex while implementing cost-saving initiatives that cut operating expenses by CAD1.54 million. • Henan Yanchang’s refined-oil sales fell 1.47 million tonnes; it booked a RMB71.77 million loss after credit-loss and asset-impairment provisions.
Outlook Management expects continued price volatility amid heightened geopolitical risk and intends to enhance cost efficiency, adjust downstream marketing strategies and explore diversification opportunities while maintaining a cautious capital structure.
No dividend was declared for 2025.
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