Hongkong Electric Holdings is expected to post strong results for last year on stable growth in core electricity supply and a bigger contribution from its Australian power investments.
Net profit is expected to be between HK$6.23 billion and HK$6.53 billion, according to a Business Post poll of five brokerages. This represents an increase of between 12.6 per cent and 18.11 per cent on the HK$5.53 billion net profit in 2000. Hongkong Electric will report its results on Thursday.
Analysts expect last year's profit to be powered largely by full-year contributions from Victoria-based power transmission joint-venture PowerCor and a HK$344 million exceptional gain from the sale of PowerCor's power retailing operations. The combined profit contribution from PowerCor and Southern Australia-based power transmission firm ETSA Utilities (both equally owned by Hongkong Electric and parent Cheung Kong Infrastructure) is estimated at between HK$200 million and HK$300 million.
Growth of 4 to 5 per cent is expected in the company's core Hong Kong electricity generation and supply business - a rise attributed to higher capital expenditure estimated at about HK$4 billion last year.
Local power providers Hongkong Electric and CLP Holdings are regulated under the Scheme of Control, which ties their core earnings to capital expenditure on power assets and caps their rate of return at 15 per cent of the value of fixed assets in use.
ING Baring Securities analyst Bill Mok Kwan-pui said low interest rates would help reduce the financing cost of Hongkong Electric and boost its Scheme of Control earnings.
