Earnings reports

CLP Group

CLP profit surges 39.6pc on asset sale gain, improved operating performance

Power producer’s operating earnings rise 14.6 per cent to HK$11.53 billion

PUBLISHED : Monday, 29 February, 2016, 2:33pm
UPDATED : Monday, 29 February, 2016, 5:26pm

CLP Holdings, the larger of Hong Kong’s two power utilities, said its 2015 net profit jumped 39.6 per cent year on year to HK$15.67 billion, thanks to gains from a plant sale in Australia and better operating performance in major markets.

“Following the restructuring in Australia and better results from other overseas operations, the group’s earnings in 2015 were at a record high,” chairman Michael Kadoorie said in the results statement filed to Hong Kong’s stock exchange on Monday.

Operating earnings rose 14.6 per cent to HK$11.53 billion, when excluding a HK$6.62 billion gain from the sale of the Iona natural gas processing and storage facilities in Victoria, and HK$1.48 billion of asset impairment charges on its generation assets in Australia.

Operating earnings from Hong Kong rose 6.4 per cent to HK$8.28 billion thanks to growth in its fixed assets. Its earnings are capped at 9.9 per cent of its average fixed assets in a year.

CLP said if fuel prices remained stable, it was confident that it could maintain its 2017 power tariff for Hong Kong at this year’s level despite stricter emission caps and a requirement to use a higher proportion of less polluting natural gas.

The long-term fundamentals of Fangchenggang are good
Richard Lancaster, CLP

Operating earnings from mainland China surged 25.2 per cent to HK$1.98 billion, thanks to strong operational performance at the Daya Bay nuclear plant in Shenzhen, and lower coal costs at its coal-fired plants.

Chief executive Richard Lancaster said utilisation of the first two units of its major coal-fired plant in Fangchenggang, Guangxi, had been hurt by the economic slowdown and higher output from hydro plants, and the third and fourth units coming on stream this year might also face lower utilisation due to competition from a nuclear plant expected to start up in a few years.

“But the long-term fundamentals of Fangchenggang are good as it is a gateway for trade with the industrialising Association of Southeast Asian Nations (Asean), and a major steel plant and other factories have moved into the city,” he said.

In India, operating profit jumped 126.7 per cent to HK$612 million, after its Jhajjar coal-fired plant swung to a HK$146 million profit, reversing a loss in 2014. The result was also helped by the reversal of a provision previously made for dividend distribution tax.

In Australia, operating profit rose 10.6 per cent to HK$836 million as lower operating and finance costs offset a 16.9 per cent depreciation of the Australian dollar against the US dollar.

Lancaster said while Australia’s power demand had grown slightly last year after four years of decline, the market remained oversupplied.

A fourth interim dividend of HK$1.05 per share was proposed, raising the year’s total to HK$2.70 per share, from HK$2.62 in 2014.

CLP shares closed 0.9 per cent lower at HK$67.8 on Monday, when the benchmark Hang Seng Index fell 1.3 per cent.