Huaneng earnings fall short of estimate

Huaneng Power International posted a lower than expected 4.83 per cent growth in first-half underlying earnings after the company failed to reach its target for containing increases in fuel costs.

The listed flagship of China Huaneng Group, the mainland's largest power producer, last night said net profit rose 32.7 per cent to 2.87 billion yuan in the period from 2.16 billion yuan a year earlier.

Earnings were bolstered by 673 million yuan gain from investment and asset disposals, with the bulk coming from the sale of shares in Shanghai-listed Yangtze Power. The amount compared with a 66 million yuan investment gain a year earlier.

Excluding investment gains, underlying interim net profit increased to 2.2 billion yuan from 2.1 billion yuan a year earlier. It was less than the 2.33 billion yuan average estimate of three brokerage analysts who did not take disposal gains into account.

Turnover grew 16.6 per cent year on year to 23.14 billion yuan on a 13.8 per cent rise in electricity sales and a 6.4 per cent average increase in tariff to 356.82 yuan per megawatt-hour (MWh).

All of the growth in power sales came from the commissioning of new plants, which more than offset lower utilisation of older plants.

Huaneng Power said average utilisation hours of its generating units 'experienced a slight decrease' year on year. It did not give figures.