Hong Kong headquartered Green Dragon Gas Ltd (AIM: GDG) reported the first full year of revenues since listing on AIM in August 2006, and said it will make a final decision on listing on a main board before the end of the current year.
The Chinese coal bed methane business had revenues of US$24.65 million in the 12 months to December 31 2008, compared with nil a year earlier, while the pretax loss widened to US$ 27.9 million from a US$8.8 million loss previously - mainly due to higher administrative expenses and financing costs.
In a statement, Green Dragon said its plan for a main board listing either in Hong Kong or London was deferred by the global market collapse, but it still on the cards and it will make a decision later this year.
The company has appointed Goldman Sachs to assist the board in evaluating strategic alternatives to the funding of its development plans and Green Dragon continues to evaluate all options to finance its future growth strategy.
Chairman Randeep Grewal commented: “Progressing into 2009, our growth will be organic as all the components necessary for robust growth into gas production and market value sales have been put in place in 2008.”
The midstream and downstream businesses are profitable and contributed the majority of the revenue in the reported period. Over the next three years these divisions are expected to provide most of the company's revenue and thereafter upstream will grow at a materially faster pace becoming the main contributor of revenue.
Evolution Securities said in a note on the back of the results that Green Dragon remains the dominant international player in Chinese CBM with a huge resource base.
“The challenge remains to monetise this resource. We increase our target price to US$13 from US$12.4,” the broker added.
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