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.