China energy unit Huaneng Power posts 31.5 per cent first-half profit rise

Huaneng Power International, the listed flagship of China's largest power producer China Huaneng Group, posted a 31.5 per cent year-on-year rise in net profit in the first half thanks to lower coal costs.

But the energy giant warned that demand growth in the electricity market will likely remain relatively low in the second half.

Given faster growth in the nation's power generating capacity, this will keep power plants' utilisation rate low, especially coal-fired ones, which are facing rising competition from clean-energy plants like hydro, nuclear and wind power plants.

"Taking into account commencement of production of new generating units in various areas, weather, water supply conditions, continuously high temperatures during the summer peaks last year resulting in higher power consumption base and other factors, the growth of nationwide electricity output will still hover at a medium to low level," Huaneng said in a filing to Hong Kong's bourse late on Tuesday.

First-half net profit amounted to 8.95 billion yuan, up from 6.81 billion yuan in the year-earlier period.

Revenue edged up 1.1 per cent year on year to 65.3 billion yuan as a 5.3 per cent rise in output - thanks to plants acquired from the parent and newly commissioned plants - more than offset lower power prices.