YANCHANG PETRO (00346) has issued a profit warning to the market, projecting a significant decline in its financial performance for the first half of the year.

According to a company announcement, the group estimates that for the six months ending June 30, 2026, it will record a revenue of approximately HK$7.024 billion. This figure represents a decrease of about 30% compared to the HK$9.995 billion reported in the same period of the previous year.

Furthermore, the company anticipates a loss of roughly HK$40.2 million for the same period. This is a substantial increase of approximately 44% from the loss of HK$27.8 million recorded in the corresponding period of 2025.

The board of directors has attributed the decrease in revenue and the increase in losses to two primary factors. The first reason is a reduction in the group's income from its Chinese oil product sales business, which fell by approximately HK$2.957 billion. This drop was driven by a decline in the scale of the oil trading business and a continuous narrowing of the retail business margin, leading to a sales volume decrease of about 32% year-on-year.

The second reason for the increased loss is a significant foreign exchange impact. The company's Canadian oil and gas production business incurred a foreign exchange loss of approximately HK$10.7 million. This loss resulted from fluctuations in the USD to CAD exchange rate affecting the company's USD-denominated fixed-term loans.