CLP profits hit by volatile Australian energy contracts
The larger of Hong Kong’s two electricity suppliers reports profit of HK$5.91 billion, 3.5pc down from 2016 and short of expectations
CLP Holdings, the larger of Hong Kong’s only two electricity suppliers, reported weaker than expected profit after volatile energy prices in Australia saw it book a loss on forward energy sales contracts there.
The company, 35.1 per cent-owned by its largest shareholder, the Kadoorie family, generated a net profit of HK$5.91 billion in the year’s first six months, down 3.5 per cent from HK$6.13 billion in the same period last year, it said in a filing to Hong Kong’s bourse after the morning trading session closed.
“[Our Australia profit was hit by] significant volatility in the value of energy contracts,” said Sir Michael Kadoorie, chairman of the sole electricity generator and distributor in Kowloon, the New Territories and Lantau Island.
“Against a backdrop of uncertain energy policies, the energy market in Australia remains very challenging, leading to a period of high and volatile wholesale prices.”
The profit is lower than the HK$6.3 billion estimated by Citi’s head of Asia-Pacific utilities research Pierre Lau who had expected higher Australia earnings, and the HK$6.09 billion forecast by another analyst polled by Bloomberg.
It amounted to 45.8 per cent of the HK$12.9 billion average full-year profit estimate of 12 analysts, according to Bloomberg.