Yanchang Petroleum International Limited reported a 29.7% year-on-year fall in first-half 2026 revenue to HK$7.02 billion, driven by a 29.9% contraction in its core supply-and-procurement segment and softer upstream output in Canada. Group loss widened to HK$40.21 million (H1 2025: HK$27.85 million) as thinner trading margins and higher finance costs offset lower depreciation and administrative expenses.
Segment performance • Supply & Procurement (mainland China): Revenue declined to HK$6.94 billion (H1 2025: HK$9.90 billion) on a 32% drop in product volume to 0.93 million tonnes. Segment profit edged up to HK$5.64 million (H1 2025: HK$2.37 million) after tighter cost control and improved pricing on fixed-investment and railway distribution sales. • Exploration, Exploitation & Operation (Canada): Sales slipped 14.3% to HK$80.69 million as production fell 30.3% to 183,000 barrels of oil equivalent. The unit posted a HK$12.71 million loss (H1 2025: HK$34.26 million), curtailed by extreme weather, third-party processing constraints and reduced capital expenditure.
Margin and cost dynamics Group gross profit contracted to HK$114.14 million, reflecting a 29.9% drop in trading volumes. Field operation costs fell 16.6% to HK$37.95 million, while depreciation, depletion and amortisation declined 37.3% to HK$37.49 million, tracking lower output. Finance costs rose 6.9% to HK$19.42 million, mainly on secured term-loan interest and accretion of decommissioning liabilities.
Balance sheet and liquidity Cash and bank balances improved to HK$120.98 million (31 Dec 2025: HK$63.72 million) after a HK$56.46 million operating cash inflow. Trade receivables dropped sharply to HK$32.16 million from HK$1.11 billion, while trade payables fell to HK$7.94 million from HK$1.14 billion. Inventories halved to HK$147.82 million. Nevertheless, net current liabilities expanded to HK$263.75 million, pulling the current ratio down to 0.61× and raising going-concern uncertainty. Management is negotiating refinancing, banking facility renewals and shareholder support to bolster liquidity.
Capital structure Total interest-bearing debt stood at HK$573.42 million, comprising HK$184.70 million in unsecured PRC bank loans, HK$115.44 million in shareholder loans (2.27% p.a., due December 2026) and HK$439.28 million in secured term loans from immediate parent Yanchang Petroleum (Hong Kong) Co., Ltd. Gearing was 200.9%, while equity attributable to owners slipped to HK$507.75 million.
Post-period event On 21 August 2026 management of a PRC subsidiary reported suspected inventory misappropriation involving a staff member and an external party, with an estimated value of RMB19.24 million (HK$22.32 million). Both suspects have been detained. The financial impact is under investigation and was not reflected in the interim results.
Outlook Management expects continued volatility in crude prices due to geopolitical tensions, supply-demand imbalances and energy-transition pressures. The Group plans to prioritise cost discipline, liquidity management and potential asset optimisation while cooperating with authorities on the fraud investigation and reviewing internal controls. No interim dividend was declared.