Citic Ltd. net rises 14% in first half on oil demand

By Ying Lou, Bloomberg

HONG KONG — Citic Resources Holdings Ltd., a unit of China’s fourth-largest oil producer, said profit rose 14 percent in the first half as the nation’s demand for energy and resources increased.

Net income climbed to HK$138.3 million (US$18 million), or 2.83 Hong Kong cents a share, from HK$121.2 million, or 2.78 cents a year earlier, the company said in a statement to the Hong Kong stock exchange Sunday. Sales rose to HK$5.2 billion.

The company is transforming itself from a metals producer to a supplier of oil in the world’s fastest-growing major economy. Shareholders of government-backed Citic Resources approved the $1 billion acquisition of a Kazakhstan oil field from its parent in June, adding to oil output in Indonesia, where the company bought its first energy asset last year.

“The board expects oil to be important for the group’s overall development as an energy and resources company,” the company said in the statement. The company’s businesses “continued to perform satisfactorily during the first half of 2007.”

Citic Resources has more than doubled in Hong Kong trading this year, outpacing the 30 percent advance in the city’s benchmark Hang Seng Index.

The company last month agreed to conduct joint exploration with Kuwait Foreign Petroleum Exploration Co. in countries including Indonesia.

Parent China International Trust & Investment Corp., or Citic Group, agreed to buy the Karazhanbas field in Kazakhstan from Canada’s Nations Energy Co. in October for $1.9 billion. Shareholders of Citic Resources approved the plan to acquire the project from parent in June. The company will complete the acquisition by the end of this year, Citic Resources said Sunday.

Citic Resources bought 51 percent of an Indonesian oilfield for $97 million, gaining access to 39 million barrels of gross oil reserves, it said last July.

Temasek Holding Pte, Singapore’s state-owned investment group, became the second-biggest shareholder of Citic Resources after it agreed to buy 202 million shares, raising its stake to 11.06 percent from 7.27 percent, Citic Resources said June 19.