Growth abroad offsets home losses of power firm
Hongkong Electric Holdings
Hongkong Electric Holdings has vowed to bolster overseas investments after its Australian portfolio fuelled 3.7 per cent growth in net profit to $6.28 billion last year.
The portfolio, comprising power distributors ETSA Utilities in South Australia, Powercor Australia in Victoria and CitiPower in Melbourne, generated a profit contribution of $820 million, 78.64 per cent higher than in 2003.
The strong growth helped offset a 1.76 per cent drop in profit to $5.52 billion from its home market - Hong Kong and Lamma islands - in which the utility failed to hit the permitted return range for the second consecutive year.
'The relatively lower risk and predictable nature of our overseas businesses provide support for sustained profit growth,' said chairman George Magnus.
A spokeswoman said markets such as Australia, Europe and North America were particularly appealing to the utility.
However, overseas profit contribution accounted for only 12.08 per cent, or $759 million, of the group's earnings last year.
At home, Hongkong Electric failed to achieve a return of between 13.5 per cent and 15 per cent of its net average assets in use, as stipulated under the scheme of control.
Poor sales arising from a cooler summer compounded by a depleted development fund caused an estimated $600 million shortfall in scheme of control earnings last year, a European analyst said.
The development fund, a consumer-owned cash reserve aimed at cushioning any shortfall in scheme of control earnings, ran out last year.