Newocean Energy : AUDIT RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

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NewOcean Energy Holdings Limited

(新海能源集團有限公司)*

(Incorporated in Bermuda with limited liability)

(Stock Code: 342)

website:http://www.newoceanhk.com

AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

FINANCIAL HIGHLIGHT

• - Total sales volume of energy products increased by around 5.65% to approximately 6,601,000 tons. The revenue from operations for the year also increased by approximately 36.04% to approximately HK$30 billion reflecting the increase in sale volume and the substantially high price for energy products compared with last year.

• - The overall gross profit margin dropped from around 7.36% in 2017 to around 6.55% in 2018 because the fluctuation in the international oil price has made the gross profits of oil products thinner during the year. Given that the sales increased, the overall gross profit increased by approximately 21.09% to approximately HK$1,967 million.

• - Although the overall gross profit increased, the depreciation of Renminbi in 2018 recorded a net exchange loss of approximately HK$124 million and due to the sharp fall of oil price at December end, the Group has provided a net realizable value allowance on inventories of HK$120 million. Thus, profit for the year attributable to owners of the Company from operations decreased by around 9.17% to approximately HK$759 million.

• - Basic earnings per share from operations is approximately HK$0.52.

• - Equity attributable to owners of the Company increased by around 7.96% to approximately HK$7,465 million.

The Board of Directors (the "Board") of NewOcean Energy Holdings Limited (the "Company") is pleased to announce the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2018 together with comparative figures for the year ended 31 December 2017 as follows:

* For identification purposes only.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

2018	2017
Notes	HK$'000	HK$'000
Revenue	3	30,007,805	22,058,618
Cost of sales	(28,040,808)	(20,434,255)
Gross profit	1,966,997	1,624,363
Other gains and losses	5	(194,308)	212,441
Other income	5	113,519	68,722
Selling and distribution expenses	(504,903)	(508,548)
Administrative expenses	(349,657)	(346,530)
Finance costs	6	(284,525)	(198,750)
Impairment loss on trade and other receivables	(50,000)	-
Share of profits of joint ventures	1,967	1,760
Share of loss of an associate	(419)	(992)
Profit before taxation	8	698,671	852,466
Taxation	7	(28,215)	(27,663)
Profit for the year	670,456	824,803
Other comprehensive (expense) income
Item that will not be reclassified to profit or loss:
Exchange differences arising on translation to
presentation currency	(246,229)	243,721
Item that will be reclassified to profit or loss:
Exchange differences arising on translation of
foreign operations	80,904	-
Total comprehensive income for the year	505,131	1,068,524
Profit (loss) for the year attributable to:
Owners of the Company	759,042	835,631
Non-controlling interests	(88,586)	(10,828)
670,456	824,803
Total comprehensive income (expense)
attributable to:
Owners of the Company	597,933	1,075,552
Non-controlling interests	(92,802)	(7,028)
505,131	1,068,524
Basic earnings per share	9	HK$0.52	HK$0.57

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2018

2018	2017
Notes	HK$'000	HK$'000
Non-current assets
Property, plant and equipment	2,407,720	2,412,995
Land use rights	382,845	400,882
Prepaid lease payments for coast	4,523	5,535
Goodwill	742,051	751,948
Other intangible assets	222,360	377,939
Interest in an associate	6,483	7,188
Interests in joint ventures	27,995	26,760
Deposits paid and prepayments	245,956	485,150
Deferred tax assets	1,231	1,953
4,041,164	4,470,350
Current assets
Inventories	1,720,504	1,399,680
Trade receivables	10	4,726,261	3,575,770
Other debtors, deposits and prepayments	2,232,484	1,996,941
Amount due from an associate	10,821	3,695
Amount due from a joint venture	2,036	1,347
Derivative financial instruments	4,886	15,012
Land use rights	19,087	20,008
Prepaid lease payments for coast	783	817
Properties held for sales	150,274	156,774
Properties under development for sales	724,928	653,896
Pledged bank deposits	243,095	253,611
Bank balances and cash	2,295,797	1,789,191
12,130,956	9,866,742
Current liabilities
Trade payables	11	858,439	1,285,526
Other creditors and accrued charges	328,646	497,638
Contract liabilities	149,776	-
Amount due to an associate	14,530	-
Amount due to a joint venture	8,674	3,096
Derivative financial instruments	9,912	7,861
Tax liabilities	105,206	118,112
Borrowings secured by pledged bank
deposits - repayable within one year	12	227,347	235,610
Borrowings secured by other assets
- repayable within one year	12	20,575	18,364
Borrowings unsecured - repayable within
one year	12	4,537,417	3,709,829
6,260,522	5,876,036
Net current assets	5,870,434	3,990,706
Total assets less current liabilities	9,911,598	8,461,056

2018	2017
Notes	HK$'000	HK$'000
Capital and reserves
Share capital	13	146,812	147,303
Share premium and other reserves	7,318,674	6,768,047
Equity attributable to owners of the Company	7,465,486	6,915,350
Non-controlling interests	(23,604)	69,198
Total equity	7,441,882	6,984,548
Non-current liabilities
Deferred tax liabilities	81,684	92,925
Borrowings secured by other assets -
repayable over one year	12	33,832	31,293
Borrowings unsecured - repayable over one
year	12	2,354,200	1,352,290
2,469,716	1,476,508
9,911,598	8,461,056

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2018

1. General

The Company is incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). Its ultimate and immediate holding company is Uniocean Investments Limited ("Uniocean"), a company incorporated in the British Virgin Islands. The ultimate controlling shareholder is Shum Siu Hung. The Company acts as an investment holding company. The principal activities of the Group are the sales and distribution of liquefied petroleum gas ("LPG") and natural gas ("NG"), oil/chemical products business and sales of electronic products. The address of the registered office and principal place of business of the Company are disclosed in the corporate information of the annual report.

The functional currency of the Company is Renminbi ("RMB"), the currency of the primary economic environment in which the Group operates. For the purpose of the consolidated financial statements and convenience of the financial statements users, the results and financial position of the Group are expressed in Hong Kong dollars ("HK$"), the presentation currency for the consolidated financial statements.

2. Application of new and amendments to Hong Kong Financial Reporting Standards ("HKFRSs")

New and Amendments to HKFRSs that are mandatorily effective for the current year

The Group has applied the following new and amendments to HKFRSs issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") for the first time in the current year:

HKFRS 9	Financial Instruments
HKFRS 15	Revenue from Contracts with Customers and the
related Amendments
HK(IFRIC) - Int 22	Foreign Currency Transactions and Advance
Consideration
Amendments to HKFRS 2	Classification and Measurement of Share-based
Payment Transactions
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with
HKFRS 4 Insurance Contracts
Amendments to HKAS 28	As part of the Annual Improvements to HKFRSs
2014 - 2016 Cycle
Amendments to HKAS 40	Transfers of Investment Property

Except as described below, the application of the new and amendments to HKFRSs in the current year has had no material impact on the Group's financial performance and positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements.

2.1 HKFRS 15 "Revenue from Contracts with Customers"

The Group has applied HKFRS 15 for the first time in the current year. HKFRS 15 superseded HKAS 18 "Revenue", HKAS 11 "Construction Contracts" and the related interpretations.