Offshore operations boost earnings for Power Assets

PUBLISHED : Thursday, 07 March, 2013, 12:00am
UPDATED : Thursday, 07 March, 2013, 6:12am

Net profit at Power Assets, the power firm controlled by Li Ka-shing, rose 7 per cent last year to HK$9.73 billion.

Turnover grew 2 per cent to HK$10.42 billion, thanks to a 1 per cent increase in the average basic tariff and a 1 per cent gain in unit sales of electricity in Hong Kong, the company said.

Net profit from operations outside Hong Kong surged 11.9 per cent to HK$5.11 billion, while that from operations in the city grew 2.4 per cent to HK$4.62 billion.

"Our international businesses, spearheaded by our operations in [Britain], now account for over half of our total earnings," Power Assets chairman Canning Fok Kin-ning said.

The firm now has investments in power generation, transmission and distribution, as well as gas distribution, in Britain, Australia, mainland China, New Zealand, Thailand and Canada, apart from its base in Hong Kong.

Together with a joint venture in renewable energy transmission in Australia since September and the acquisition in October of a 30 per cent stake in British gas distributor Wales & West Utilities, Power Assets serves more than 15 million customers worldwide and has interests in over 10,000 megawatts of power generation assets and more than 440,000 kilometres of power and gas networks.

On the mainland, the firm's profits and unit sales of electricity declined last year, mainly due to low demand for coal-fired electricity, Fok said.

"Our operations in Canada, Thailand and New Zealand delivered weaker performances compared with 2011," he said.

"Despite overall uncertainty, we remain cautiously optimistic about the long-term stability of key markets. The ever-increasing focus on minimising emissions will continue in the next five years, not only in Hong Kong but in all our markets, which will necessitate continuous capital investment in green technology and processes."

At the end of last year, Power Assets had net debt of HK$18.46 billion with a net-debt-to-equity ratio of 29 per cent, lower than the 30 per cent in 2011. The company has HK$6.14 billion in cash plus available bank credit of HK$8.03 billion.

Power Assets will pay a final dividend of HK$1.83 per share, compared with HK$1.70 for a year earlier.