Utility looks to acquisitions after making 643.2m yuan profit China Power International Development (CPID) has forecast that growth in its coal costs will slow to between 10 per cent and 15 per cent this year, helping to ease fuel expenses that now form the bulk of total operating costs. Expectations of a slowdown come as Beijing allows power firms to peg electricity tariffs to coal prices from this year, according to executives of the power company led by Li Xiaolin, daughter of former premier Li Peng. They spoke at a press conference yesterday to review the company's earnings for last year. CPID's fuel costs jumped 31 per cent last year because of 'record high' coal prices and should continue to rise, said executive vice-president Hu Jiandong. 'The rise this year will definitely be lower than in 2004,' he said, giving an estimate of 10 per cent to 15 per cent. The company's average unit price for coal last year rose 85.93 yuan a tonne from the previous year. Although chronic power shortages in China have boosted electricity producers' top-line numbers, surging coal prices have squeezed margins. CPID's net profit last year rose 6.28 per cent year on year to 643.2 million yuan, the company said as it released its first results since listing in Hong Kong in October last year. But revenue for the year rose a higher, 15.12 per cent to 3.35 billion yuan as the company sold 14.73 billion kilowatts, 5.8 per cent more than in 2003. Earnings per share were 28 fen compared with 29 fen in 2003. Final dividend per share was 2.5 cents. Chinese power companies are scrambling to build new plants to meet the country's shortfall, which the existing 440 gigawatts (GW) of total capacity has failed to fill. CPID said it would be looking at making acquisitions to boost its asset portfolio but declined to give details. 'Acquisitions will be a focus this year and next,' Mr Hu said. 'We [aim] to do this as fast as possible, but it has to be done step by step.' The State Electricity Regulatory Commission said last month that this year's new installed capacity would be at least 60,000 megawatts (MW) and the shortfall would be bridged by the end of next year, when more power plants began operations. The shortfall last year was 30,000 MW as power consumption, fuelled by rapid economic growth, rose 14.9 per cent year on year. Power consumption this year has been forecast to rise 12 per cent on the back of an 8 per cent expansion in the overall economy.