The Hong Kong and China Gas Company (0003) scrapped the issue of bonus shares for the first time since 2009 after recording a 16.5 percent fall in net profit last year to HK$5 billion from a year ago.

While the company values its dividend payout policy, it also needs to ensure sufficient funds for business development and operations as the continuous spread of the Covid-19 pandemic together with geopolitical instability has brought a number of uncertainties to the global economy, chief financial officer John Ho Hon-ming said in a press conference yesterday.

It also needs money as there are "a lot of investment opportunities with good returns" in China after the country pledged to reach a carbon dioxide emissions peak by 2030 and achieve carbon neutrality by 2060, Ho added.

The company, also known as Towngas, started the issue of bonus shares in 1991 when one new share would be issued for every five existing ones. From 1997 to 2018, except for the suspension from 2002-2005 due to SARS and 2008 for the financial tsunami, the bonus issue changed to 10 for 1 bonus shares. And in 2019 and 2020, it gave 1 bonus share to investors for every 20 existing shares they owned.

Towngas said in a filing yesterday the drop in profit was partly because of a HK$1.5 billion one-off provision - it wrote off and impaired some of the production facilities of a chemical plant and telecommunications network facilities on the mainland, and made asset provision for certain gas refilling stations which had ceased operation.

It declared a final dividend of 23 HK cents, making the total 2021 dividend payout stay at 35 HK cents and also forecasted that the dividend to be paid this year would not be less than last year barring any unforeseen circumstances.

Its revenue last year jumped more than 30 percent to HK$53.6 billion. Total volume of gas sales in Hong Kong slightly decreased by 1 percent, in contrast to an 8.8 percent increase in the number of appliances sold resulting from a rise in new property move-ins due to a slowdown of the pandemic.

Deputy managing director Peter Wong Wai-yee said Towngas plans to raise gas prices in the city this year when the Covid situation eases, but does not have a schedule for now.

Its gas sales volume in China, however, increased 16 percent compared to 2020, and the number of customers also grew 10 percent to 35 million.

Announcing the results are, from left, deputy managing director Peter Wong, managing director Alfred Chan and John Ho. Sing Tao

Towngas scraps bonus shares issue as profit declines 16pc