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Eric Ng

CLP Holdings, the larger of Hong Kong’s two electricity suppliers, posted a better-than-expected 8 per cent net profit growth, thanks mainly to higher profits from Australia. 
The utility firm, set up in 1901, generated an underlying net profit of HK$13.3 billion (US$1.7 billion) last year, up from HK$12.3 billion in 2016. 
It was higher than the HK$12.9 billion average estimate of six analysts polled by Bloomberg. 
“These results reflect the strength of our Group that comes from the diversity of our business,” Michael Kadoorie, chairman of the sole electricity generator and distributor in Kowloon, the New Territories and Lantau Island, said in a filing to the Hong Kong stock exchange on Monday. 
“Hong Kong will remain our core market for the foreseeable future while the dynamic markets of mainland China, India and Australia continue to provide the prospect for long-term growth.” 
When non-operating items such as property assets revaluation gains and non-recurring taxation items are added, total earnings grew 12.1 per cent to HK$14.25 billion.
The company announced a fourth interim dividend of HK$1.14 per share, up from HK$1.09 a year earlier, bringing the full-year payout to HK$2.91 versus HK$2.8 last year. 
Its mainstay profit source, Hong Kong, where CLP has enjoyed for over half a century guaranteed regulated return, saw net profit grow 2.6 per cent to HK$8.86 billion last year. 

This was despite a 0.2 per cent drop in electricity sales volume due to mild weather in the year’s first half, thanks to higher regulated assets.   
Australia, its second largest profit contributor, saw profit jump 48.1 per cent to HK$2.74 billion, helped by higher wholesale prices and lower operating costs. 
Profit from mainland China fell 18.6 per cent to HK$1.24 billion, as lower profit because of higher coal costs unmatched by higher power prices was partially offset by first-time profit from a nuclear power operator in Guangdong province acquired last year.  
Daiwa Capital Markets’ analysts said CLP was expected to see further earnings growth in Australia in this year’s first six months
In India, profit surged 38 per cent to HK$647 million, propelled by better operating efficiency, higher utilisation of its mainstay coal-fired plant and lower interest expense. 
Analysts expect CLP to report higher profits this year, partly on the back of a full-year profit contribution booking from the Guangdong nuclear unit. They have an average net profit estimate of HK$13.54 billion.  
Daiwa Capital Markets’ analysts said CLP was expected to also see further earnings growth in Australia in this year’s first six months, helped by a low earnings base in its wholesale business there in last year’s first half when profit was hurt by high wholesale price volatility. 
Cost savings on the retail operation Down Under would also help lift earnings this year, they added.  
CLP’s Hong Kong business, protected by a guaranteed return regime under which returns are capped at 9.99 per cent of net permitted assets, will see the cap lowered to 8 per cent from October this year for 15 years. 
The reduction could see CLP’s net profit next year fall to HK$12.23 billion, according to analysts’ consensus estimate. 
Chief executive Richard Lancaster said on Monday that even after the reduced return rate takes effect, the company will strive to maintain its existing policy of paying “stable, growing dividends” in the long term. 

In Vietnam, the company remains optimistic about the likelihood of clinching a deal this year to invest in two coal-fired power plants, a future growth driver, despite years of impasses at negotiations with fuel suppliers, local governments and power purchasers delaying progress, he added. 
Meanwhile, CLP reiterated in the filing its stance that “a material outflow of economic benefits” is unlikely from a court case in Australia as it was “vigorously” defending the claims. 
Its EnergyAustralia subsidiary has been fending a lawsuit initiated by state-owned Queensland Investment, whose Lochard Energy unit bought the Iona natural gas processing and storage facilities in southwest Victoria state from CLP in late 2015 for A$1.78 billion (US$1.4 billion). 
Lochard in May last year filed a legal challenge seeking A$967 million of damages, alleging CLP had made “certain representations” in the asset disposal agreements related to the “technical performance” of the facilities. 
CLP’s shares closed up 1.9 per cent, at HK$78.9, on Monday. 


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CLP Group

Hong Kong utility CLP beats analysts expectations with 8pc rise in 2017 net profit   

CLP Holdings’ power plant on Lamma Island, the sole electricity generator and distributor in Kowloon, the New Territories and Lantau Island in Hong Kong. Photo: Roy Issa

(left to right): Geert Peeters, Executive Director & Chief Financial Officer of CLP Holdings Limited; Richard Kendall Lancaster, Chief Executive officer of CLP Holdings Limited; and Betty Yuen So Siu-mai, Group Director & Vice Chairman of CLP Power Hong Kong Limited, poses for a photo during the CLP Holdings final results press conference in Tsim Sha Tsui. 26FEB18 SCMP / Winson Wong

Interview with Sir Michael Kadoorie about photo exhibition of previously unpublished photographs of Hong Kong in the 1950s taken by his father, the late Lord Lawrence Kadoorie. 26SEP17 SCMP/ Nora Tam

CLP boss Kadoorie lashes out at  uncertainty over Australian energy policy

“Given Australia’s current situation, creating those conditions [to attract investment] will be a challenge, but we believe a critical ingredient is a bi-partisan and national approach to energy that gives the industry the confidence to invest,” said Michael Kadoorie, after CLP’s annual meeting on Friday. Photo: Edmond So

Sir Michael Kadoorie, Chairman of The Hongkong and Shanghai Hotels, Limited, attends the Company's annual general meeting & press conference at The Peninsula Hong Kong hotel in Tsim Sha Tsui. 16MAY11

CLP wins 5b yuan Guangdong nuclear project stake bid

View of the Yangjiang nuclear power station in Guangdong province. Photo: SCMP Pictures

Queensland Investment Corp files compensation claim against CLP Holdings for HK$5.6b

CLP Holdings, the larger of Hong Kong’s two monopoly electricity suppliers, says its Australian unit will defend itself against a compensation claim by the Queensland state government. Photo: Sam Tsang

CLP says it’s keen to bid 17pc of Yangjiang power plant put up for auction by CGN

Yangjiang Nuclear Power Station has six 1,000 megawatt CPR-1000 pressurised water reactors. Photo: SCMP

CLP says power rate rise won't be as bad as forecast

Utility says power rate rise won't be that bad

Business

Utility’s annual net profit rises to HK$13.3b from HK$12.3b in 2016 


Hong Kong company reporting season

Energy

Hong Kong utility CLP beats analysts expectations with 8pc rise in 2017 net profit

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Utility’s annual net profit rises to HK$13.3b from HK$12.3b in 2016

Utility’s annual net profit rises to HK$13.3b from HK$12.3b in 2016