CLP Holdings POWER SUPPLY MAJOR CLP Holdings warns that prevailing high coal prices will cloud earnings prospects in Hong Kong and the mainland. The utility reported a forecast-beating 12 per cent jump in net profit to $8.61 billion last year, helped by a bigger-than-expected property gain of $373 million and lower-than-expected group expenses and finance costs. Profit contributions from its core electricity supply business in Kowloon, the New Territories and Lantau saw stable growth at 8.1 per cent to $6.78 billion. The group's overseas portfolio generated a 4.4 per cent increase in profit to $1.67 billion. CLP group managing director and chief executive Andrew Brandler warned that prices and freight charges for coal were expected to stay high in the next two to three years. Higher costs trimmed profit at its mainland coal-fired plants by 61.62 per cent last year to $106 million. In Hong Kong, CLP's profits were protected by the 'scheme of control'. Although the company's fuel costs rose by 20 per cent last year they were passed on to customers. The company declared a final dividend of 73 cents per share and a special final dividend of 15 cents, the full-year payout rising 12.6 per cent to $2.23 per share. While praising the company's performance for last year, analysts believed it was unlikely to be repeated this year, citing a profit-challenged overseas portfolio, hazy visibility on capital expenditure in Hong Kong and a dwindling number of sales expected from the Cheung Kong (Holdings) Laguna Verde development in Hunghom. JP Morgan analyst Edmond Lee said: 'CLP's financial plan for 2005-08 has not been approved yet [and this will] affect the company's capital expenditure for this year.'