Yanchang Petroleum International Issues Profit Warning for FY2025

Major Turnaround from Profit to Substantial Loss Expected

Yanchang Petroleum International Limited (Stock Code: 00346) has issued a significant profit warning, announcing that the Group is expected to record a substantial net loss of approximately HK\$780 million for the year ended 31 December 2025. This represents a dramatic reversal compared to the profit of about HK\$56 million recorded in the previous year.

Key Factors Affecting Financial Performance

• Macroeconomic and Geopolitical Headwinds: The prolonged Russo-Ukrainian war, heightened tensions in the Middle East, and uncertainty stemming from the US-initiated tariff war have all contributed to a weak global economic recovery throughout 2025.
• China’s Economic Slowdown: The Chinese economy underperformed expectations, with continued weakness in industrial output and refined oil consumption further dampening crude oil demand.
• Decline in Oil Prices: WTI crude oil prices fell markedly, with the average price dropping from approximately US\$77 per barrel in 2024 to around US\$66 per barrel in 2025.

Specific Impacts on Yanchang Petroleum International

1. Decreased Revenue and Gross Profit: The sluggish global economy led to a drop in both revenue and gross profit for the Group.
2. Substantial Impairment Losses: The company recorded significant impairment losses on its oil and gas assets related to its production business in Canada.
3. Impairment on Goodwill and Non-Current Assets: The refined oil and by-products trading business in China incurred further impairment losses on goodwill and other non-current assets.
4. Provision for Bad Debts: Additional provisions for bad debts were made for the refined oil and by-products trading segment in China.

Important Information for Shareholders and Investors

• The information disclosed is based on unaudited management accounts and may be subject to adjustments. The audited results are expected to be released on or about 26 March 2026.
• The scale of the projected loss and the nature of the impairments could have a material impact on the share price and are highly price sensitive.
• Shareholders and potential investors are strongly advised to exercise caution when dealing in the Company’s securities, as the final audited results could differ from the current estimates.

Board and Management

The announcement was authorized and issued by the Board, led by Chairman Mr. Feng Yinguo, and includes executive, non-executive, and independent non-executive directors. The Board assures stakeholders that further details will be provided upon the finalization of the annual results.

Conclusion

This profit warning signals a significant deterioration in the Group’s financial position and outlook. The anticipated loss, driven by challenging market conditions and substantial asset impairments, is likely to weigh heavily on the Company’s share price and investor sentiment in the near term.

Disclaimer: The above information is based on the Company’s preliminary unaudited management accounts and may be subject to change. Investors are urged to exercise caution and await the formal audited results announcement before making investment decisions. This article does not constitute investment advice.

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