CLP's Australia spin-off nears 'beauty contest'

PUBLISHED : Tuesday, 28 February, 2012, 12:00am
UPDATED : Tuesday, 28 February, 2012, 12:00am


Power supplier CLP has taken another step forward in spinning off its energy flagship in Australia, a growth driver for the group's profit last year.

Chief executive Andrew Brandler yesterday said the utility had engaged financial advisers to consider the prospect of a separate listing of TRUenergy, Australia's No 2 electricity supplier, pending the final decision.

The market is abuzz with rumours that CLP will hold a 'beauty contest' next month to choose the investment bankers to handle the potential listing, which may raise up to A$3 billion (HK$25 billion) on the Sydney stock exchange in the second half of this year.

'A listing will allow TRUenergy its own capability to raise capital to meet its future investment need,' Brandler said, but declined to elaborate. 'I can't say the time of the potential listing.'

He added that CLP's power plants and wind power assets in India are a candidate for a separate listing in due course.

TRUenergy, which is CLP's largest overseas subsidiary, and supplies gas and electricity in Victoria, South Australia, New South Wales, ACT and Queensland, saw its operating earnings excluding one-off items more than double to HK$2.91 billion last year, from HK$1.3 billion in 2010.

The sterling performance was driven by contribution from EnergyAustralia and Delta Western GenTrader, New South Wales-based electricity retailers that TRUenergy acquired for A$2.03 billion last year.

CLP's operating earnings excluding one-off items jumped 13 per cent to HK$10.31 billion. Including a non-recurring HK$1.93 billion impairment loss on the Yallourn power plant in Victoria, its net earnings was 10 per cent lower at HK$9.28 billion, or HK$3.86 per share.

The final dividend was raised 4.3 per cent to 96 HK cents per share, taking the full-year payout 1.6 per cent higher at HK$2.52 per share.

In Hong Kong, CLP operating earnings grew 3 per cent to HK$6.33 billion based on a capital investment of HK$7.77 billion last year, the same amount it spent in 2010.

CLP Power vice-chairman Betty Yuen So Siu-mai said the profit meant the HK unit earned the maximum return of 9.99 per cent, as stipulated in the scheme of control agreed with the government. The agreement ties its returns to spending in power assets.

CLP chairman Michael Kadoorie yesterday warned that sourcing natural gas from the mainland - a deal between the Hong Kong and the mainland governments in 2008 - would lead to an average 40 per cent increase in fuel costs annually to 2015 and increase pressure for tariff hikes.

CLP shares dropped 30 HK cents to HK$66.15 yesterday after the results were announced.