18 March 2005 – Huaneng Power International, one of China’s largest independent power producers, has reported a fall in profits in 2004 in spite of revenues up by nearly 30 per cent.
The company’s financial results for 2004 showed that its net operating revenues amounted to RMB30.118bn ($3.6bn), an increase of 28.78 per cent on 2003 results. However, net profit fell by 1.96 per cent on 2003 levels to RMB5.324bn.
Huaneng said that the sharp increase in the operation costs, particularly coal, was to blame for the fall in profits in the face of strong growth.
A company statement read: “In view of the difficult situations of the coal supply market in 2004, the board of directors of the company was satisfied with the operating results of last year.”
Although the increase in power generation and rise in tariffs had resulted in a significant increase in the company’s net operating revenues in 2004, and newly acquired plants had brought considerable profits to the company, these failed to completely offset the increase in power generation costs caused by escalating coal prices.
Huaneng generated a total of 114.28 kWh in 2004, an increase of 25.7 per cent. Average coal consumption rates for power sold and power generated were 337.49 gram/kWh and 319.27 gram/kWh respectively. The price of fuel increased by 32.97 per cent year on year.
This year promises to present much of the same for Huaneng as China is expected to continue its rapid development while coal will continue to be in short supply.