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Eric Ng

Shares of CLP Holdings had their biggest intraday percentage drop in nearly three months after the bigger operator of Hong Kong’s two electricity suppliers posted a 2018 net profit that missed analysts’ expectations.
CLP shares closed down 3.2 per cent at HK$93.80.
The utility, founded in 1901, said its 2018 net profit fell 4.9 per cent to HK$13.55 billion (US$1.73 billion), due to a substantial asset impairment in India arising from a customer dispute. Analysts were expecting a net profit of HK$14.4 billion, according to the average estimate of nine analysts polled by Bloomberg.
The company announced a fourth interim dividend of HK$1.19 per share, up 4.4 per cent from HK$1.14 a year earlier, bringing the full-year payout to HK$3.02 versus HK$2.91 last year.
Last year’s profit decline was due to the non-recurrence of favourable non-operating gains in 2017 booked on property revaluation and tax provision reversal, said chairman Michael Kadoorie in a filing to Hong Kong’s bourse.
CLP to buy assets to expand, as it aims to be the first Hong Kong utility to sell shares in India IPO
It was also due to a HK$469 million rise in provisions for doubtful customer receivables – mainly from a dispute on a payment owed by the former India customer of its natural gas-fired power plant, CLP said.
Underlying net profit – which excludes property revaluation gains and asset impairments – amounted to HK$13.98 billion, up 5.1 per cent from 2017.
“The power purchase agreement for our gas-fired Paguthan power plant expired in December 2018 … We continue to explore long-term options for the project, although the lack of affordable natural gas makes this challenging,” said chief executive Richard Lancaster, referring to CLP’s challenge in India.
Later, at a news briefing, he added about the India dispute, “This is a long-standing legal dispute. While we have received some favourable judgments along the way, as the power purchase agreement has come to an end, we felt it was appropriate for us to include a provision.”
CLP suffered losses six years ago in India due to coal and gas shortages, with 2018 profit from India falling 11.6 per cent to HK$572 million.
Despite recurring troubles with its fossil fuel projects, CLP maintains its aim to double the size of its India unit via acquisitions and new-build renewable energy projects in the next five years and list it on the local bourse, chief financial officer Geert Peeters told South China Morning Post last October.
It is the joint ambition of CLP and its new partner, Caisse de dépôt et placement du Québec (CDPQ), the Canadian public pension-fund manager that recently bought a 40 per cent stake in the unit from CLP, he said.
Hong Kong utility CLP beats analysts expectations with 8pc rise in 2017 net profit
Hong Kong, its biggest profit contributor, also saw operating profit fall 3.4 per cent to HK$8.56 billion, after a revamp in its guaranteed return regime saw its return cap cut to 8 per cent from 9.99 per cent on net permitted assets from last October for 15 years.
The cut in returns could see CLP’s overall 2019 net profit fall to HK$12.8 billion, before rising to HK$13.2 billion next year, according to analysts’ consensus estimate.
Profit from mainland China jumped 74.7 per cent last year to HK$2.16 billion, due to higher contribution from a nuclear project in Guangdong, in which CLP invested 16 per cent since late 2017.
Its contribution is expected to rise further as the sixth and last reactor will be brought online this year.
Profit from Australia grew 20.6 per cent to HK$3.3 billion on high wholesale power prices, although they are expected to soften this year as a large number of wind and solar farms come online, Lancaster said, adding volatile prices are not good for both consumers and suppliers.


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CLP Group

CLP Holdings shares fall after 2018 net profit misses estimates

A worker on a transmission pole during an implementation programme by the Rural Electrification Corporation in the village of Manpur Kulchaura in India’s Uttar Pradesh state on January 15, 2017. Photo: Bloomberg

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 profit surges 39.6pc on asset sale gain, improved operating performance

<p>Power producer’s operating earnings rise 14.6 per cent to HK$11.53 billion</p>

CLP’s Castle Peak Power Station in Tuen Mun. Photo: Dustin Shum

CLP profits hit by volatile Australian energy contracts

CLP’s Hong Kong business posted a 1.9 per cent rise in profit to HK$4.36 billion as fixed-asset values rose. Photo: Felix Wong

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CLP shares fall 3.2 per cent in Hong Kong
Net profit fell 4.9 per cent last year to HK$13.55 billion, due to a substantial asset impairment in India


Hong Kong utility operator cites a substantial asset impairment in India arising from a customer dispute for the surprisingly weak net profit last year.


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CLP Holdings shares fall after 2018 net profit misses estimates

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}CLP shares fall 3.2 per cent in Hong Kong Net profit fell 4.9 per cent last year to HK$13.55 billion, due to a substantial asset impairment in India

CLP shares fall 3.2 per cent in Hong Kong

Net profit fell 4.9 per cent last year to HK$13.55 billion, due to a substantial asset impairment in India