Key Points Company and Industry Information 1. **Company Name and Presentation Availability**: The company is CLP Holdings, and the 2024 interim results briefing is available on their website. 2. **Date and Time of Results Lodgment**: The results were lodged with the Hong Kong Exchange at around midday. 3. **Presenters**: Marisa Wong, Director of Investor Relations, Mr T. A. Chang, Chief Executive Officer, and Mr Alex Kaiser, Chief Financial Officer. [1][2][3]

CLP Holdings Limited (OTCPK:CLPHY) Q2 2024 Earnings Conference Call August 5, 2024 4:00 AM ET Company Participants Marissa Wong - Director, Investor Relations T.K. Chiang - Chief Executive Officer Alex Keisser - Chief Financial Officer Conference Call Participants Pierre Lau - Citi Evan Li - HSBC Steven Choi - JPMorgan Rob Koh - Morgan Stanley Marissa Wong Good afternoon, and welcome to CLP Holdings 2024 Interim Results Briefing. My name is Marissa Wong, Director of Investor Relations. And today, I'm joined ...

Financial Performance - In the first half of 2024, CLP Holdings reported an operating profit of HKD 5,683 million, a 22.0% increase, driven by strong performance across its businesses and improved earnings from EnergyAustralia[3]. - Total profit for the first six months rose to HKD 5,951 million, compared to HKD 5,060 million in the same period last year, reflecting a 17.6% year-on-year growth[4]. - The group's consolidated revenue slightly increased by 1.8% to HKD 44,086 million[3]. - Operating profit for the first half of 2024 increased by 22.0% to HKD 5,683 million, driven by strong performance across various businesses and improved profitability from EnergyAustralia[9]. - Total profit for the first six months of 2024 grew to HKD 5,951 million, reflecting a 17.6% increase compared to the same period in 2023[10]. - The company reported a basic and diluted earnings per share of HKD 2.36 for the first half of 2024, compared to HKD 2.00 in the same period of 2023[43]. - The total comprehensive income for the period was HKD 6,330 million, an increase from HKD 5,144 million in the previous year[44]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.63 per share, consistent with the previous year[5]. - The company announced an interim dividend of HKD 0.63 per share for the second period of 2024, consistent with the dividend of HKD 0.63 per share in 2023, to be distributed on September 13, 2024[75]. - The dividend will be distributed based on the currently issued shares totaling 2,526,450,570[75]. Energy Transition and Sustainability Initiatives - CLP Holdings is focusing on low-carbon energy solutions, with a new 600 MW gas-fired unit D2 at the Lung Kwu Tan Power Station now operational[6]. - The company is committed to enhancing its financial strength and strategic position in the Australian market to contribute to the clean energy transition[7]. - CLP Holdings is actively pursuing opportunities in green hydrogen production to support Hong Kong's goal of achieving net-zero emissions by 2050[6]. - The company is committed to investing in opportunities arising from the transition to a net-zero future, aiming to provide affordable, reliable, and sustainable energy[8]. - The company aims to reduce greenhouse gas emissions intensity from electricity sold by tightening the target from 0.3 kg CO2 equivalent per kWh to 0.26 kg CO2 equivalent by 2030[36]. - The company has not recorded any environmental violations leading to fines or prosecutions in the first half of 2024[35]. - The company has received multiple awards for its sustainability reporting, including the Gold Award at the Asia Annual Report Awards for six consecutive years[38]. Renewable Energy Projects - In mainland China, existing renewable energy projects saw a slight increase in generation, with 300 MW of new projects under construction, bringing total wind and solar capacity to 450 MW[7]. - Apraava Energy in India secured multiple low-carbon project development rights, including a 350 MW renewable energy project and installation of over 1.7 million smart meters[7]. - EnergyAustralia is developing flexible generation capacity projects and advancing significant energy storage projects in Victoria and South Australia[7]. - CLP's renewable energy development in mainland China remains robust, with solar and hydropower output increasing due to new projects, despite some operational challenges at nuclear plants[19]. - CLP China has initiated construction on 300 MW of solar and wind projects, including a 100 MW wind farm in Guizhou and two solar projects in Jiangsu, expected to be operational by mid-2025[20]. - Apraava Energy is actively developing renewable energy projects, including a 350 MW capacity and nearly 200 km of transmission lines, to meet India's growing energy demand[27]. - Apraava Energy successfully secured a 300 MW solar PV project in Rajasthan, with construction expected to begin in the second half of this year[28]. - The company has also won a 50 MW solar project in the same state, with construction anticipated to start after receiving approval later this year[28]. Customer and Market Developments - Electricity sales in Hong Kong rose to 16,743 million kWh, a 2.6% increase year-on-year, supported by economic recovery and higher demand due to warmer weather[12]. - The reliability of electricity supply remains at a world-class level of 99.999%, with ongoing efforts to enhance supply reliability and minimize public impact during incidents[14]. - Average net electricity price was reduced by 1.6% in the first half of 2024, in response to declining international fuel prices[15]. - Profit from the Hong Kong energy business increased by 2.8% to HKD 4,165 million, while profit from mainland China decreased by 28.0% to HKD 988 million due to planned outages[10]. - The Indian segment saw a significant profit increase of 59.8% to HKD 203 million, attributed to higher electricity prices and stable contributions from renewable energy projects[10]. - EnergyAustralia's retail customer count decreased by 23,200, approximately 1%, by June 2024 compared to December 2023, although customer satisfaction scores improved[23]. Operational Efficiency and Safety - The company is implementing a comprehensive review of its power supply system management to reduce electricity incidents and improve response times[14]. - The company is committed to enhancing workplace health and safety, with a strategy update planned by the end of the year to strengthen health and safety management systems[34]. - The total recordable injury rate and lost time injury rate slightly increased, reflecting a rise in incidents during maintenance shutdowns[32]. - The lost time injury rate for employees increased to 0.15 in the first half of 2024 from 0.03 in the same period of 2023, while the total recordable injury rate rose to 0.26 from 0.08[33]. Financial Position and Capital Management - The company reported a decrease in cash and cash equivalents to HKD 2,929 million from HKD 5,182 million, a decline of 43.3%[46]. - The bank loans and other borrowings increased to HKD 48,443 million from HKD 44,943 million, an increase of 7.1%[47]. - The group maintained a strong liquidity position with HKD 27.3 billion in undrawn bank loan facilities and HKD 2.9 billion in bank balances as of June 30, 2024[66]. - The group secured a total loan facility of HKD 5.3 billion during the first half of 2024 for refinancing and business needs[66]. - The group’s net debt to total capital ratio increased to 34.0% as of June 30, 2024, up from 31.6% at the end of 2023[68]. - Funds from operations (FFO) interest coverage ratio improved to 9 times for the six months ended June 30, 2024, compared to 7 times in the same period of 2023[68]. Governance and Compliance - The board of directors was updated with new members, receiving strong support from shareholders during the 2024 annual meeting[69]. - The company maintained compliance with its corporate governance code, with only one deviation regarding the publication of quarterly financial results[71]. - The audit and risk committee submitted five audit reports and three special review reports, with no significant issues identified affecting the financial statements[73].

Financial Performance - The company reported an operating profit of HKD 10,127 million for 2023, with a pre-fair value change operating profit of HKD 8,823 million[10]. - Total revenue decreased by 13.4% to HKD 87,169 million, with Hong Kong electricity business revenue slightly up by 0.1% to HKD 50,630 million, while revenue from energy businesses outside Hong Kong fell by 28.3% to HKD 35,039 million[16]. - Total profit rebounded to HKD 6,655 million from HKD 924 million in 2022, reflecting a strong recovery[15]. - The company reported a net cash inflow from operating activities of HKD 23,567 million, an increase of 85.1% compared to HKD 12,734 million in 2022[16]. - The company's earnings per share increased significantly to HKD 2.63 from HKD 0.37, reflecting a growth of 620.2%[16]. - The fair value changes reversed from a loss of HKD 2,979 million to a gain of HKD 2,125 million, impacting the comparability of results[15]. - Total profit for 2023 was HKD 6,655 million, compared to HKD 924 million in 2022, after accounting for a non-cash goodwill impairment of HKD 5,868 million related to EnergyAustralia[30]. - The group reported an operating cash flow increase of 85% to HKD 23,567 million compared to HKD 12,734 million in 2022, reflecting strong financial health[122]. - The company reported a net profit attributable to shareholders of HKD 6,655 million for 2023, up from HKD 924 million in 2022[71]. - The company declared a total dividend for 2023 at HKD 3.10 per share, maintaining the same level as in previous years[93]. Sustainability and Environmental Goals - The company aims to achieve net-zero greenhouse gas emissions across its value chain by the end of 2050, with strengthened carbon reduction targets for 2030[2]. - The company is committed to enhancing transparency in climate-related disclosures and sustainability reporting, exceeding regulatory requirements[2]. - The company continues to focus on sustainable energy solutions and community welfare, aligning with its mission to create value for shareholders and customers[18]. - The total greenhouse gas emissions across Scope 1, Scope 2, and Scope 3 for the group decreased by 12% year-on-year to 52,988 kilotons of CO2 equivalent[114]. - The greenhouse gas emission intensity of electricity sold decreased from 0.55 kg CO2 equivalent per kWh to 0.54 kg CO2 equivalent per kWh compared to the previous year[114]. - The company aims to reduce absolute Scope 3 greenhouse gas emissions from the 2019 level by 28% by the end of 2030[115]. - The company plans to reduce the greenhouse gas emission intensity of electricity sold to 0.1 kg CO2 equivalent per kWh by the end of 2040 and achieve net-zero emissions by the end of 2050[115]. - The company has committed to reviewing the "Climate Vision 2050" targets at least every three years[115]. - The company is focusing on capital investment in renewable energy infrastructure, including wind, solar, nuclear, and battery storage systems[112]. - The company is actively supporting industries in enhancing quality and consistency in carbon markets[112]. Operational Developments - The company operates a total generation and storage capacity of 23,291 MW, including 9,719 MW from coal and 6,093 MW from gas[9]. - The company is actively pursuing growth opportunities in the Greater Bay Area and regional energy markets, emphasizing its commitment to sustainable development[4]. - The company has streamlined its annual report and sustainability report to enhance clarity and avoid redundancy, focusing on key financial impacts and sustainability strategies[2]. - The company successfully launched Hong Kong's first offshore liquefied natural gas receiving terminal in September 2023, enhancing energy supply stability[30]. - The company plans to construct a 300 MW wind farm in Karnataka, India, and has commenced partial operations at the Sidhpur wind project in Gujarat[32]. - The company aims to enhance operational flexibility and develop skills to meet future energy demands[21]. - The company is exploring growth opportunities in renewable energy, transmission, and advanced metering infrastructure (AMI) projects, supported by significant backing from CLP Group and CDPQ[55]. - The company is committed to supporting the clean energy development in Shandong Province, with operational wind projects totaling approximately 600 MW[47]. - The company is investing in nuclear energy infrastructure to reduce energy production costs while aligning with decarbonization efforts[107]. Customer and Community Engagement - Customer satisfaction score improved to 74, up from 72 in 2022[20]. - A total of HKD 9 million was donated to support energy-saving initiatives and community development[28]. - The company has allocated over HKD 200 million through the "CLP Community Energy Saving Fund" to support community initiatives promoting renewable energy and stimulate the Hong Kong economy[146]. - Approximately 2,000 underprivileged households will receive free inspections and repairs of electrical installations under the new grassroots home electricity safety program[148]. - The company is focusing on customer-centric energy solutions, including smart grid technology, to enhance market share and increase revenue through innovative products and services[108]. - The "All Electric Home" program promotes low-carbon lifestyles by supporting developers in installing energy-efficient appliances and solar panels in new residential units[134]. Workforce and Talent Management - The company has implemented a new operational model to respond more quickly to customer needs and growth opportunities[165]. - Over 800 new employees were recruited in Hong Kong and mainland China, maintaining a rapid hiring pace to support business growth[157]. - The average employee participated in 44.1 hours of internal and external training courses in 2023, consistent with 2022 levels[160]. - The group received the "Best Corporate Wellbeing Program" award at the CTgoodjobs "Best HR Awards" and a gold award for "Mental Health Friendly Excellent Organization" from the Occupational Safety and Health Council[154]. - The group has expanded its engineering talent pool by collaborating with local and overseas educational institutions, benefiting over 2,100 students since the establishment of the training academy in 2017[159]. - The group has implemented a flagship trainee engineer program in Hong Kong, with over 40 young engineers participating, the highest number to date[157]. - The group is committed to reducing risks associated with high-altitude work and falling objects, adjusting strategies based on specific regional business risks[154]. Regulatory and Market Challenges - The company faces financial risks due to evolving global net-zero policies, which may accelerate the closure of coal-fired power plants and lead to early transformation costs[107]. - The company may face regulatory uncertainties and public sentiment challenges regarding energy pricing, which could impact long-term financial performance[109]. - The current regulatory framework for the company in Hong Kong is a 15-year agreement expiring in December 2033, with a mid-term review completed in 2023[172]. - The company is committed to fulfilling stakeholder expectations by playing an active role in society, leading in carbon reduction, and investing in green energy solutions[105]. Technological Advancements - The company is focusing on developing new energy services and business models, transitioning from traditional utility operations to diversified offerings[174]. - The company has completed the installation of a floating solar photovoltaic system for the Drainage Services Department in Hong Kong, which was connected to the grid in September[174]. - The company is collaborating with local authorities in mainland China to adapt to market reforms aimed at establishing a unified national electricity market[173]. - The company has over 100 robotic process automation projects underway to streamline workflows and reduce repetitive tasks[165]. Investment and Financial Strategy - The company is investing over AUD 5 billion in its Climate Transition Action Plan (CTAP) to support energy transition initiatives[52]. - The group has initiated sustainable financing activities under the Climate Action Financing Framework, linking performance indicators to emission reductions[64]. - The company is committed to maintaining a solid financial foundation to meet investor expectations while prioritizing community and environmental interests[112]. - The group raised HKD 20 billion in bank loan facilities linked to emission reduction performance in December 2022, and in the first half of 2023, China Power arranged HKD 2.3 billion in one-year bank loans[127].

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Financial Data and Key Metrics Changes - The group's operating earnings before fair value movements increased by 33% year-on-year to over HK$10 billion, with total earnings rebounding to HK$6.7 billion from HK$924 million in 2022 [11][31][15] - Capital investment remained healthy at HK$12.8 billion in 2023, with total dividends per share maintained at HK$3.10, the same as last year [12][32] - Net debt decreased to HK$52.3 billion from HK$54.9 billion a year ago, with a net debt to total capital ratio improving to 31.6% [23][23] Business Line Data and Key Metrics Changes - Hong Kong's operating earnings slightly increased to HK$8.8 billion, driven by investments in electricity infrastructure and decarbonization [40] - EnergyAustralia recovered from heavy losses in 2022 to close to break-even in 2023, with significant improvements in its energy segment [18][38] - In India, Apraava Energy's operating earnings rose by 43% to HK$301 million, reflecting strong momentum in its diversified portfolio [20] Market Data and Key Metrics Changes - Energy output declined by 9%, primarily due to exiting the Fangchenggang coal-fired power station and the deconsolidation of Apraava Energy [33] - The average net tariff in Hong Kong fell by 7.4% compared to the previous year, expected to remain competitive with moderate adjustments [56] - The Australian retail market faced intense competition, leading to a slight reduction in customer accounts [33] Company Strategy and Development Direction - The company aims to decarbonize operations while maintaining a reliable and affordable energy system, with a focus on expanding renewable energy and flexible assets [52][82] - The approved 2024-2028 Development Plan includes HK$52.9 billion in capital expenditure to support Hong Kong's economic infrastructure and decarbonization agenda [54][84] - The company is committed to investing in growth opportunities arising from the shift to clean energy and electrification [82] Management's Comments on Operating Environment and Future Outlook - Management highlighted the strong performance amid global economic uncertainty, emphasizing the robustness of diversified energy businesses in the Asia-Pacific region [27] - The company remains focused on operational improvements and financial performance, particularly in EnergyAustralia, while navigating challenges in the retail market [19][38] - Future cash flow generation is expected to normalize, with a focus on maintaining a solid financial position to support business growth [105] Other Important Information - The company has strengthened its greenhouse gas emission intensity target to align with limiting global warming to 1.5 degrees Celsius [7][92] - The transition to net-zero emissions by 2050 remains a core commitment, with plans to phase out coal before 2040 [92] Q&A Session Summary Question: EnergyAustralia's low sales price contracts - Management explained that contracts are progressively forward-sold over a two-year period, with most low-price contracts rolling off in 2023 [66][99] Question: Sustainability of EnergyAustralia's improvement - Management noted that while wholesale prices have softened, forward price curves indicate higher prices compared to the previous energy crisis [68] Question: Return on Tallawarra B gas power station - The station was commissioned in February 2024, and management expects acceptable returns, subject to market conditions [69] Question: Coal supply situation at Mount Piper - Management confirmed stabilization efforts at Springvale and a multi-mine contract to ensure coal supply [71][117] Question: Growth CapEx guidance - Management indicated that the new Development Plan will guide CapEx, with expectations of HK$10 billion to HK$11 billion annually [136] Question: Dividend outlook for 2024 - Management stated that dividends are subject to Board approval, aiming for stability and growth in line with business performance [135]

Financial Performance - The total profit for 2023 was HKD 6,655 million, a strong rebound from HKD 924 million in 2022, despite a non-cash goodwill impairment of HKD 5,868 million[4]. - The operating profit for 2023 increased by 33.2% to HKD 10,127 million, benefiting from reliable contributions from core businesses in Hong Kong and mainland China, as well as significant improvements in overseas operations[2]. - The comprehensive revenue decreased by 13.4% to HKD 87,169 million, impacted by a 5.1% reduction due to the termination of accounting consolidation of Apraava Energy and weak wholesale spot prices in Australia[2]. - The group reported a net profit of HKD 7,670 million for the year, down from HKD 9,511 million in 2022, representing a decline of 19.4%[46]. - The group recorded a capital expenditure impairment provision of HKD 15,402 million for the year[46]. - The company reported a total tax expense of HKD 2,973 million for 2023, up from HKD 103 million in 2022[51]. - The company reported a basic and diluted earnings per share of HKD 2.63 for 2023, compared to HKD 0.37 in 2022[53]. Dividends - The total dividend for 2023 remained unchanged at HKD 3.10 per share, consistent with 2022, including a fourth interim dividend of HKD 1.21 per share[4]. - The fourth interim dividend for 2023 was declared at HKD 1.21 per share, consistent with the previous year[70]. Operational Developments - The company plans to construct a 300 MW wind farm in Karnataka and has commenced partial operations at the Sidhpur wind project in Gujarat, showcasing its commitment to zero-carbon projects[4]. - EnergyAustralia's operational performance significantly improved in 2023 after the energy crisis in 2022, with the highest number of customers receiving support for cost-of-living pressures[5]. - The company successfully launched Hong Kong's first offshore liquefied natural gas receiving station in September 2023, enhancing energy supply stability[4]. - The company is focused on carbon reduction as a primary objective, with a strategy aligned with the "Climate Vision 2050" to achieve net-zero greenhouse gas emissions by mid-century[5]. - The company is constructing an advanced combined cycle gas turbine unit D2 at the Lung Kwu Tan Power Station to phase out coal-fired generation[11]. - The company plans to explore the feasibility of natural gas and hydrogen co-firing at the Lung Kwu Tan Power Station as part of its clean energy initiatives[12]. - The company has connected over 2.23 million smart meters for customers since the start of its meter replacement program in 2018, with completion expected by 2025[13]. - The company is actively involved in the development of electric vehicle infrastructure and has formed an alliance with 14 like-minded organizations to promote electric commercial vehicle adoption[13]. Renewable Energy Initiatives - The company has accelerated the expansion of its renewable energy portfolio to meet growing energy demands, aligning with national carbon peak and neutrality goals[15]. - The company has secured construction quotas for multiple renewable energy projects, totaling 1,190 megawatts across Guangxi and Shandong provinces[16]. - Apraava Energy's renewable energy assets saw a 23% increase in generation due to improved wind resources and partial commissioning of the Sidhpur project[24]. - The company is actively expanding its renewable energy portfolio to meet the growing demand for corporate power purchase agreements and green power certificates[17]. - EnergyAustralia aims to increase its renewable energy projects to a maximum of 3,000 MW by 2030, with an investment exceeding AUD 5 billion planned[21]. Market and Customer Insights - In 2023, the local electricity sales volume in Hong Kong increased by 1.6% to 35,392 million kWh, driven by economic recovery and record high summer temperatures[9]. - The electricity sales volume for residential customers decreased by 1.8% to 9,929 million kWh, while commercial and public service sectors saw increases of 3.3% and 3.4% respectively[10]. - EnergyAustralia's customer base decreased by approximately 20,700 (or 0.8%) in 2023, although the customer attrition rate remains better than the market average[21]. Leadership and Governance - The leadership team has undergone changes, with the appointment of Mr. Jiang Dongqiang as CEO and Mr. Luo Jiajin as President, both bringing extensive experience to the company[6]. - The board of directors of CLP Holdings includes Sir Michael Kadoorie, Mr. Paul Poon, Mr. Li Yuen, Mr. Fok Ying Tung, and Ms. Yuen So Siu Mei as non-executive directors[73]. - Independent non-executive directors consist of Sir Adrian Montague, Mr. Nicholas Allen, Ms. Mu Xiu Xia, Ms. Chan Siu Mei, Ms. Wu Yan An, Mr. Gu Chun Yuan, Mr. Chan Zhi Si, and Ms. Wang Xiao Jun[73]. - Executive directors are Mr. Jiang Dongqiang and Mr. Lan Lingzhi[73]. Financial Position and Assets - Non-current assets totaled HKD 202,121 million in 2023, slightly up from HKD 201,565 million in 2022[39]. - Current assets decreased to HKD 26,930 million in 2023 from HKD 34,461 million in 2022[39]. - The group’s total assets as of December 31, 2023, amounted to HKD 229,051 million, while total liabilities were HKD 116,669 million[46]. - The company’s cash and cash equivalents decreased significantly, with other receivables dropping from HKD 6,499 million in 2022 to HKD 1,700 million in 2023[56]. Sustainability and Environmental Goals - The company is committed to exploring growth opportunities in renewable energy, transmission, and AMI projects, supported by major stakeholders[25]. - Apraava Energy's greenhouse gas reduction targets have been certified by the Science Based Targets initiative (SBTi), highlighting its leadership in decarbonization[24]. - The company reported a one-time income from a mid-term compensation related to a dispute, impacting comparable items[25]. Future Outlook - The development plan for 2024 to 2028 has been approved, with a capital expenditure of approximately HKD 52.9 billion to meet growing electricity demand[11]. - The company plans to continue expanding its renewable energy projects and improve operational efficiency in its various segments[32]. - The company expects to maintain a high level of liquidity in 2024 due to dividend income and cash inflows from subsidiaries, joint ventures, and associates[64].

Financial Performance - Total profit for the first half of 2023 was HKD 5,060 million, reversing a loss of HKD 4,855 million in the same period last year[3]. - Revenue for the six months ended June 30, 2023, was HKD 43,302 million, a decrease of HKD 4,292 million or 9.0% compared to HKD 47,594 million in the same period of 2022[10]. - EBITDAF for the same period was HKD 9,449 million, down HKD 227 million or 2.3% from HKD 9,676 million in 2022[10]. - The share of profit from joint ventures and associates after tax was HKD 1,931 million, an increase of HKD 763 million or 65.3% compared to HKD 1,168 million in 2022[10]. - The profit from the Hong Kong segment increased slightly by 2.3% to HKD 8,644 million, supported by ongoing investments in infrastructure projects[14]. - The company reported a net profit of HKD 5,060 million, compared to a loss of HKD 4,855 million in the same period of 2022, marking a significant turnaround[95]. Revenue Breakdown - Revenue from Hong Kong electricity business was HKD 24,252 million, while revenue from energy business outside Hong Kong was HKD 18,161 million, resulting in a total revenue of HKD 43,302 million, a decrease of 9.0% compared to the previous year[4]. - Revenue from Hong Kong increased by HKD 2,248 million or 9.8% to HKD 25,126 million, primarily due to higher fuel adjustment charges and a slight increase in electricity sales[12][13]. - Revenue from Australia decreased by HKD 4,104 million or 19.3% to HKD 17,199 million, impacted by a 6% drop in average AUD exchange rate and lower wholesale market prices[12][13]. - Revenue from electricity sales outside Hong Kong decreased to HKD 15,259 million, down 25.0% from HKD 20,368 million in the previous year[99]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.63 per share, consistent with the previous year[6]. - The company paid dividends totaling HKD 4,649 million to shareholders during the first half of 2023, consistent with the previous year's dividend payments[96]. Investments and Projects - The company is actively expanding its renewable energy investments in mainland China, with new projects including a 150 MW wind farm in Guangxi and an 80 MW solar photovoltaic power station in Jiangsu expected to commence operations soon[7]. - In India, the joint venture Apraava Energy is planning two wind farms with a total capacity exceeding 550 MW and has secured contracts for approximately 3 million smart meters[7]. - The company invested HKD 4.6 billion in major decarbonization infrastructure projects in Hong Kong, including offshore LNG receiving stations[19]. - The company is investing in new infrastructure projects, including a floating storage regasification unit for liquefied natural gas, which has commenced operations and will support Hong Kong's energy transition[32]. Financial Position and Assets - Total assets at the end of the reporting period were HKD 234,934 million, with total borrowings of HKD 61,228 million and shareholders' equity of HKD 105,534 million[4]. - The net debt to total capital ratio was 33.6%, an increase from 32.0% at the end of the previous year[4]. - The company's fixed assets, right-of-use assets, and investment properties totaled HKD 156,572 million as of June 30, 2023, a slight increase of 0.5%[18]. - The total liabilities of the company amounted to HKD 119,304 million, an increase from HKD 113,000 million in the previous year[100]. Operational Performance - The group's operating profit before fair value changes increased by 19.3% to HKD 4,955 million, driven by strong performance in Hong Kong and increased electricity generation from two nuclear power stations in mainland China[3]. - Operating cash flow improved significantly to HKD 7.5 billion for the six months ended June 30, 2023, compared to a cash outflow of HKD 1.7 billion in the same period of 2022[23]. - The group achieved a significant recovery in operating cash flow in Australia, returning to an inflow of HKD 400 million compared to an outflow of HKD 6.9 billion in 2022[23]. Debt and Financing - The net debt as of June 30, 2023, was HKD 58,861 million, reflecting an increase of 7.2% from HKD 54,931 million at the end of 2022[18]. - The group maintained a strong liquidity position with HKD 31.2 billion in undrawn bank loan facilities and HKD 2.4 billion in bank balances as of June 30, 2023[24]. - EnergyAustralia secured a three-year loan facility of AUD 630 million (approximately HKD 3.3 billion) from nine banks to refinance existing loans, ensuring ample liquidity for operations[25]. Regulatory and Governance - The company continues to collaborate closely with the Hong Kong government on the regulatory framework for the 2024-2028 development plan, which is crucial for long-term planning and investment[6]. - The company fully complied with the corporate governance code as of June 30, 2023, with only one deviation regarding the publication of quarterly results[65]. - The board of directors saw changes, including the appointment of Ms. Ruan Su Shaomei as a non-executive director and Mr. Bao Lixian as vice chairman on January 1, 2023[66]. Sustainability and Environmental Initiatives - The company is committed to ensuring stable and sustainable electricity services to support Hong Kong's economic recovery and development[8]. - The company is committed to supporting the Hong Kong government's long-term economic and infrastructure development while promoting energy transition towards a lower carbon future[37]. - The company is collaborating with public transport operators to support the electrification of public transport, including the provision of charging specifications for over 50 new double-decker electric buses[36]. - The company has installed rainwater harvesting systems and automatic drip irrigation systems at five new substations in Hong Kong to reduce water usage[50]. Employee and Community Engagement - As of June 30, 2023, the company employed 7,879 full-time and part-time employees, a decrease from 8,183 in the same period of 2022[46]. - The company engaged in community service projects, benefiting approximately 28,000 local residents through healthcare initiatives in India[56]. - The company awarded scholarships of HKD 10,000 each to students overcoming adversity through its "New Generation • New Power Award Scheme"[59]. Future Outlook - The company plans to expand its operations in Australia and India, focusing on increasing market share in these regions[100]. - The company plans to continue its market expansion and product development strategies to enhance future growth prospects[103].

CLP Holdings Limited (OTCPK:CLPHY) Q2 2023 Earnings Conference Call August 7, 2023 4:00 AM ET Company Participants Marissa Wong - Director, Investor Relations Richard Lancaster - Chief Executive Officer Nicolas Tissot - Chief Financial Officer Conference Call Participants Evan Li - HSBC Pierre Lau - Citibank Ken Liu - UBS Robert Koh - Morgan Stanley Marissa Wong Good afternoon, everybody, and welcome to CLP's 2023 Interim Results Briefing. My name is Marissa Wong, Director of Investor Relations, and I'm joi ...

Financial Performance - For the first half of 2023, CLP Holdings reported an operating profit of HKD 4,955 million, a 19.3% increase compared to the previous year, driven by strong performance in Hong Kong and mainland China [3]. - The total profit for the group turned around from a loss of HKD 4,855 million in the same period last year to a profit of HKD 5,060 million this year, after accounting for unrealized fair value changes [3]. - Consolidated revenue decreased by 9.0% to HKD 43,302 million, impacted by a 5.0% reduction due to the termination of the merger with Apraava Energy [3]. - The group's operating profit before fair value changes increased by 19.3% to HKD 4,955 million in the first half of 2023, driven by strong performance in Hong Kong and increased electricity generation from two nuclear power stations in mainland China [9]. - Total profit for the first six months turned around to HKD 5,060 million from a loss of HKD 4,855 million in the same period last year, as unusual fair value changes from 2022 (HKD 8 billion loss) did not recur [9]. - Revenue for the first half of 2023 was HKD 43,302 million, a decrease of 9.6% compared to HKD 47,594 million in 2022 [41]. - Operating profit for the first half of 2023 was HKD 5,225 million, a significant recovery from an operating loss of HKD 8,124 million in the same period of 2022 [41]. - Net profit for the first half of 2023 was HKD 5,548 million, compared to a net loss of HKD 4,954 million in 2022 [42]. - Basic and diluted earnings per share for the first half of 2023 were HKD 2.00, recovering from a loss of HKD 1.92 per share in 2022 [41]. - Total comprehensive income for the first half of 2023 was HKD 5,144 million, compared to a total comprehensive loss of HKD 1,468 million in 2022 [42]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.63 per share, consistent with the previous year [5]. - The company announced a second interim dividend of HKD 0.63 per share for 2023, consistent with the previous year, to be distributed on September 15, 2023, based on 2,526,450,570 shares issued [71]. Operational Developments - In mainland China, the company is expanding its renewable energy investments, with a 150 MW wind farm in Guangxi starting construction and an 80 MW solar photovoltaic plant expected to commence operations soon [6]. - The company is committed to investing in a new offshore liquefied natural gas receiving station in Hong Kong to support the transition to a low-carbon future [5]. - The company plans to enhance its operational reliability in Australia by addressing issues at its major power plants, which is expected to improve overall performance in the second half of the year [5]. - The construction of the 600 MW combined cycle gas turbine unit D2 at the Lung Kwu Tan Power Station is progressing and is expected to be fully operational next year, complementing the 550 MW D1 unit that was commissioned in 2020 [15]. - The second new gas turbine unit D2 at the Lamma Power Station is expected to be operational next year, utilizing selective catalytic reduction technology to reduce nitrogen oxide emissions [35]. - The new offshore liquefied natural gas receiving station commenced operations in summer 2023, enhancing the stability of gas supply for Hong Kong [36]. - The second combined cycle gas turbine unit at Lamma Power Station is anticipated to be fully operational next year, increasing the share of natural gas in the fuel mix and further reducing carbon emissions [36]. Renewable Energy Initiatives - The company continues to invest in large infrastructure projects to support carbon reduction efforts in Hong Kong, including the operation of an offshore LNG receiving station [14]. - As of June 30, the approved renewable energy generation capacity under the "Feed-in Tariff" scheme has increased to 356 MW, equivalent to the annual electricity consumption of 85,000 residential customers [16]. - The company is collaborating with public transport operators to promote electrification, including providing technical support for the construction of two multi-storey electric bus parking facilities with a total of 850 parking spaces [17]. - The company has received over 20 orders for battery energy storage systems to replace polluting diesel generators at construction sites, aiming to reduce carbon emissions [17]. - The company continues to expand its renewable energy portfolio, with new projects including a 50 MW wind farm in Yunnan and an 80 MW solar power station in Jiangsu expected to be operational in the second half of 2023 [36]. - China Power is expanding its renewable energy portfolio, with the construction of a 150 MW wind farm in Guangxi and an 80 MW solar project in Jiangsu set to commence operations later this year [22]. Customer and Market Insights - Electricity sales volume in Hong Kong rose by 3.7% year-on-year to 16,319 million kWh, with commercial customer sales increasing by 6.6% and infrastructure and public service customer sales up by 6.5% [12]. - The residential electricity demand decreased by 2.7%, reflecting changes in consumer behavior post-COVID-19 [13]. - EnergyAustralia's customer base decreased by approximately 23,000, a decline of about 0.9%, although the churn rate remains below the market average [24]. - Revenue from electricity sales in Hong Kong increased to HKD 23,637 million, up 8.1% from HKD 21,876 million in the previous year [46]. - Revenue from electricity sales outside Hong Kong decreased significantly to HKD 15,259 million, down 25% from HKD 20,368 million in 2022 [46]. Safety and Governance - The company reported a decrease in total recordable injury rate and lost time injury rate compared to the same period last year, reflecting improved workplace safety measures [33]. - The lost time injury rate for the first half of 2023 was 0.03, a decrease from 0.05 in the same period of 2022, while the total recordable injury rate improved to 0.10 from 0.19 [34]. - The company has fully complied with its corporate governance code as of June 30, 2023, with only one deviation regarding the publication of quarterly results, opting instead for quarterly briefings [67]. - The internal audit department submitted eight audit reports and two special review reports during the first half of 2023, with one report indicating less than ideal results, but no significant impact on financial statements [69]. Leadership and Management - The appointment of a new CEO, Jiang Dongqiang, is part of the company's commitment to talent development and succession planning [7]. - The new CEO, Mr. Jiang Dongqiang, will take over on October 1, 2023, with Mr. Lan Lingzhi transitioning to an advisory role [65]. - The board of directors was updated with the election of new members, receiving strong support from shareholders, while one member retired due to retirement [67]. Future Outlook - The company plans to focus on market expansion in India and Australia, where it has seen promising growth trends [47]. - Future guidance indicates a positive outlook for revenue growth, particularly in the Asia-Pacific region, driven by strategic initiatives and market demand [47]. - The company plans to continue its market expansion and product development strategies, focusing on enhancing operational efficiency and customer service [57].