China Power International Development said its first-half profit slumped 77.3 per cent on increased fuel costs and an unrealised loss related to convertible bonds issued by associate Shanghai Electric Power. Net profit plunged to 69.6 million yuan in the six months to June 30 from 306.6 million yuan a year earlier. Turnover rose 10.2 per cent to 2.745 billion yuan. China Power booked a 162.94 million yuan loss from changes in the fair value of the derivative component of convertible bonds sold by its 25 per cent-owned Shanghai Electric Power. Excluding that accounting loss, the interim net profit totalled 232.54 million yuan, still 24.3 per cent lower than a year earlier because of an increase in fuel costs, and well below a Citigroup forecast of 282 million yuan. 'Competition in the electricity market and high fuel prices will exert a greater operating pressure on the group,' vice-chairman and chief executive Li Xiaolin said in a statement. Fuel costs increased by 17.7 per cent to 1.51 billion yuan from the corresponding period last year, accounting for 70.1 per cent of total operating expenses, the company said. Average unit fuel cost was 155.79 yuan per megawatt-hour. Its gross generation of electricity rose 3.7 per cent in the first half to 12.3 million megawatt-hours. Looking ahead, China Power said mainland economic growth would likely keep driving domestic power demand and sustain a favorable environment for the company's power generation. 'With the new power plants on stream, the supply capability of power generation would be further increased,' Ms Li said. China Power said it would speed up acquisitions and the constriction of new plants in the second half to expand its capacity. It would also actively seek government support for the commissioning of new generation units and step up efforts to control fuel costs.