Hong Kong company reporting season

CGN Power reports 2016 net profit of 7.3b yuan, missing forecasts

PUBLISHED : Wednesday, 15 March, 2017, 10:25pm
UPDATED : Wednesday, 15 March, 2017, 10:55pm

CGN Power, the Hong Kong-listed flagship of China’s largest nuclear power plants operator, posted a weaker than expected 3.7 per cent on year rise in profit for 2016.

The company recorded a net profit of 7.3 billion yuan (US$1.06 billion), up from a re-stated 7 billion yuan profit in 2015 to provide a like-for-like comparison after its 9.9 billion yuan acquisition of assets from parent China General Nuclear Power Corp last year.

The result was below the 7.5 billion yuan average forecast of 19 analysts polled by Thomson Reuters.

If foreign exchange gains and losses were excluded, net profit had risen 12 per cent.

Revenue grew 22.7 per cent to 32.9 billion yuan.

A final dividend of 5.1 fen per share was proposed, up from 4.2 fen in 2015. No interim dividend was declared in either prior year.

“The company is still in the stage with strategic opportunities from the international and domestic [markets for] clean energy development,” Zhang Shanming chairman of CGN Power said in a filing to Hong Kong’s bourse on Wednesday.

He was referring to new business in China and other nations who view nuclear power as a clean energy that can help reduce carbon emissions, as well as Beijing’s desire for the nation to export its nuclear plants construction and operating expertise.

CGN last year bought its parent’s 61 per cent stake in Guangxi Fangchenggang Nuclear Power, which is developing a 6 GW project in Fangchenggang, Guangxi province.

It also bought a 100 per cent share of CGN Lufeng Nuclear Power and became the sole owner of China Nuclear Power Engineering.

CGN Lufeng is developing a 2.5 GW nuclear power plant in Lufeng, Guangdong province, which is undergoing preparatory work after receiving government approval.

CGN Engineering is a project construction management firm and has completed 12 reactors since its inception in 1997. It has won orders for 12 more reactors.

Shares of CGN Power closed unchanged on Wednesday at HK$2.39, ahead of the results announcement.