China Resources Power surprises with H1 profit up almost 80pc
China Resources Power Holdings (CRP), which is embroiled in controversy over a 2010 coal mining investment deal, posted a forecast-beating 78 per cent jump in interim profit on the back of lower coal costs.
First-half net profit of the Hong Kong-listed mainland power producer was HK$5.33 billion, up from HK$3 billion yuan in the year-earlier period.
It was better than the HK$4.84 billion average estimate of four brokerage analyst polled by Bloomberg.
First-half turnover grew 4.5 per cent year-on-year to HK$32.3 billion, on the back of a 9.3 per cent rise in power output to 83.8 billion kilowatt-hours, the company said in a filing to the Hong Kong Stock Exchange.
CRP’s average standard coal cost for its power plants decreased 18 per cent during the reported period from the same period last year.
The company’s share price dropped 6.5 per cent year-to-date, underperforming the Hang Seng Index’s 0.8 per cent fall and rival Huaneng Power International’s 13per cent gain.
The drop was related to its merger proposal with sister firm China Resources Gas that was rejected last month by shareholders, as well as a controversial 7.9 billion yuan coal mining assets acquisition by a 49 per cent-owned subsidiary.
CRP’s management has allegedly sanctioned the acquisition at an inflated price, while certain mining rights among the assets had expired at the time of the acquisition. CRP had denied wrong-doing by its management.
Minority shareholders are seeking a court order for CRP to sue management for alleged failure in fiduciary duties to protect their interests in the deal. They are also seeking to nullify the deal.