Huaneng Power International Inc., the publicly traded unit of China’s largest electricity producer, said first-quarter profit quadrupled after higher tariffs and gains in its Singapore business.
Net income surged to 919.4 million yuan ($146 million), or 7 cents a share, in the three months ended March 31, from 226 million yuan, or 2 cents, a year earlier, the company said today in a statement to the Shanghai stock exchange. Revenue increased 12 percent to 34.3 billion yuan.
The Chinese government, which controls electricity prices to curb inflation, increased them for the first time in six months on Dec. 1 to help utilities that have posted losses because of rising fuel costs. Huaneng Power President Liu Guoyue said in March his company was profitable in the first two months of 2012 after the tariff increase.
“After the increase of on-grid tariffs in the first quarter, the company’s deficit in power generation in mainland China has decreased,” Huaneng Power said in the earnings statement. “We took advantage of market opportunities in Singapore and recorded increased profit in the market.”
Huaneng Power shares gained 6.8 percent this year in Hong Kong trading, compared with a 12 percent increase in the benchmark Hang Seng Index. The stock rose 0.7 percent to HK$4.41 at the close, before the earnings announcement.
The company didn’t elaborate on earnings from specific sectors.
First-quarter profit may increase more than 50 percent from a year earlier, Huaneng said in a statement to the Hong Kong stock exchange on April 19, citing higher tariffs as one of the reasons.
Profit slumped 65 percent to 1.18 billion yuan in 2011 on higher coal costs and capped prices, Huaneng said on March 20.
The company’s debt-to-asset ratio rose to 77.1 percent last year from 72.8 percent in 2010, President Liu said in March. The unit of state-owned China Huaneng Group Corp. is “actively” seeking financial support from the Chinese government, he said.