CLP HOLDINGS(00002)2023-08-07 04:04Financial 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].