Huaneng Renewables Profit Surges on Increased Wind Capacity

  • Net income rose 66% with record new installations in 2015
  • Huaneng added over 6% of China's new capacity additions

Huaneng Renewables Corp., a Chinese developer and operator of wind farms, said full-year profit surged 66 percent on record new capacity installations.

Net income climbed to 1.86 billion yuan ($285 million) from 1.12 billion yuan a year earlier, the Beijing-based company said Tuesday in a statement to the Hong Kong stock exchange. The mean estimate of 23 analysts compiled by Bloomberg was for a profit of 1.66 billion yuan. Sales rose 20 percent to 7.36 billion yuan.

Chinese developers installed a record 33 gigawatts of wind power last year, according to data from the National Energy Administration. Huaneng Renewables added 2.2 gigawatts of wind farms in 2015, equivalent to more than 6 percent of the new capacity additions in China.

"The company reinforced control over the progress of project construction and achieved a steady increase in power generation," with a record high of newly installed capacity, Huaneng Renewables said in the statement.

Expanding capacity may place pressure on the company’s balance sheet, Jefferies Group LLC analyst Joseph Fong said. Huaneng Renewables shares fell 3.5 percent to HK$1.96 at 12:39 p.m. in Hong Kong.

The growth in Chinese wind installations has had its drawbacks, with many turbines being left idle because the grid can’t absorb and transmit all the power they produce. Idled power generating capacity increased 69 percent last year from a year ago, according to NEA data. In response, Huaneng Renewables is increasingly locating wind farms in regions where operators have less concerns about idled turbines, it said in January.

The company’s amount of wasted wind power, known as a curtailment ratio, is unlikely to reach the worst level that the company saw in 2012, analysts led by Li Min at China International Capital Corp. wrote in a note last month.

Wind power generation at the company rose 18.6 percent in 2015 from the previous year to 13.9 million megawatt-hours, while solar power output jumped almost 63 percent to 817,562 megawatt-hours, it said in January.

— With assistance by Feifei Shen

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