Huaneng Power First-Half Profit Drops 31% on Weak China Demandby
Power generator’s profit declines to 6.18 billion yuan
China’s power use rose 1% in the first half; GDP climbed 6.7%
Huaneng Power International Inc., China’s biggest listed power generator, posted a 31 percent decline in first-half profit as weak demand growth and higher coal prices crimped earnings.
The Beijing-based company reported a net income of 6.18 billion yuan ($931 million) for the six months ended June 30, compared with 8.95 billion yuan for the same period a year ago, Huaneng Power said in a statement to the Shanghai stock exchange Tuesday. Revenue dropped 19 percent to 52.9 billion yuan.
China’s power consumption rose 1 percent in the first half, compared with a 6.7 percent growth in the country’s gross domestic product. Sluggish demand growth and a decrease in utilization caused generation at Huaneng Power’s Chinese plants to drop by 8.6 percent during the six-month period and its average on-grid settlement price to decline 12.4 percent, the state-owned company said in a statement on July 16.
“Through strict cost control and enhanced operation management, Huaneng Power managed to meet most of its operating targets in the first half,” the company said in the statement.
China’s thermal-coal power plant utilization rates in the first four months fell to a multi-year low of 46 percent, according to a Bloomberg Intelligence research note this month.
Benchmark power-station coal price at Qinhuangdao rose 8 percent to 400 yuan per ton on average from January 4 to June 27, according to data compiled by Bloomberg.