Hong Kong power utility CLP returns to profitability in the first half but warns of uncertain outlook due to Covid-19

CLP Holdings posts a net profit of US$775.4 million for the first half ended June compared to a net loss of US$117 million a year earlier

First-half sales of electricity in Hong Kong fell 1.2 per cent year on year amid reduced demand from hotels and restaurants

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The headquarters of power utility CLP Holdings in Hong Kong. Photo: Shutterstock Images

Published: 4:08pm, 3 Aug 2020Updated: 10:59pm, 3 Aug 2020

CLP Holdings, the larger of Hong Kong’s two power utilities, posted a net profit of HK$6.01 billion (US$775.4 million) for the first half, but the company said the outlook remains uncertain as the coronavirus pandemic continues to weigh on the markets in which its operates.

“The second half of 2020 is likely to remain highly uncertain for the world, for Hong Kong and for CLP,” said chairman Michael Kadoorie.

Restrictions on business and social activity in the first quarter dampened demand for electricity, affecting both the company’s generation and retail businesses, Kadoorie said in the results statement on Monday. The decline was somewhat balanced in the second quarter by the resumption of economic activity in the Asia-Pacific region such as Australia, China, Taiwan and India where it operates, he added.

The increase in net profit against a loss of HK$907 million in the year-earlier period was mainly due to positive changes in the fair value of energy hedging contracts in Australia, according to the company. Operating earnings rose 12 per cent year on year to HK$6.13 billion.

CLP said demand for electricity in Hong Kong fell marginally in the first half. Photo: Roy Issa

In Hong Kong, first-half sales of electricity fell 1.2 per cent year on year to 15,729 gigawatt hours.

The company said electricity sales to the commercial sector, especially hotels and restaurants, were particularly hit hard by travel curbs and social distancing restrictions, but residential sector sales grew as people spent more time at home aided by the hot and humid weather in the second quarter.

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