Huaneng Power International, Inc. Announces 2012 Interim Results

BEIJING, July 31, 2012 /PRNewswire-Asia/ -- Huaneng Power International, Inc. ("HPI", the "Company") (NYSE: HNP; HKEx: 902; SSE: 600011) today announced its unaudited operating results for the six months ended June 30, 2012.

For the six months ended June 30, 2012, the Company and its subsidiaries recorded consolidated operating revenue of RMB 67.180 billion (equivalent to approximately USD 10.622 billion based on the USD-RMB exchange rate of USD 1 to RMB 6.3249 as of June 30, 2012), representing an increase of 4.88% compared to the same period last year. The profit attributable to equity holders of the Company was RMB 2.122 billion (equivalent to approximately USD 0.335 billion), representing an increase of 87.64% compared to the same period last year. The earnings per share were RMB 0.15 (equivalent to approximately USD 0.02) and earnings per ADS were RMB 6 (equivalent to approximately USD 0.95). The increase of Company's net profit was mainly attributable to the carry-over effect of the tariff adjustment last year and the Company's effective cost controls.

During the first half of 2012, the Company focused on improving economic efficiency, proactively responded to the changing business environment and made significant progress on power generation, cost control, energy conservation and environmental protection, project development and construction.

Power Generation. The power plants of the Company within China generated 150.173 billion KWh on consolidated basis for the first half of 2012, representing a decrease of 1.46% from the same period last year, and achieved an aggregate sales volume of 141.637 billion kWh, a decrease of 1.45% from the same period last year. The decrease of the Company's power generation was mainly attributable to the following factors: firstly, the power generation in the regions where the Company's power plants are located experienced negative or low growth during the first half of this year as a result of the distribution of installed capacity of the Company, while hydropower generation in certain provinces had seen significant growth, which sharply reduced the potential of power generation from local thermal power plants; secondly, the installed capacity of the Company grew at an average rate below the national average for the first half of this year; and thirdly, the Company had relatively higher base of power generation for the first six months last year (the Company's power generation in the first half of 2011 increased by 28.25% as compared to the same period of 2010, whilst the corresponding growth rate nationwide was 13.5%, thus the company's power generation growth rate in the first half of 2011 was 14.75 percentage points higher than the nationwide rate), which correspondingly affected the power generation growth rate of the Company in the first half of 2012.

For the first half of 2012, the aggregate power generation of Singapore Tuas Power Ltd. accounted for a market share of 26.65%, representing a decrease of 0.33 percentage point compared to the same period last year.

Cost Controls. Coal supply exceeded demand for the first half of 2012 as a result of slower economic growth in China, causing the coal price on a downward trend and lower than that for the same period last year. Seizing this opportunity, the Company optimized its procurement structure by further increasing the purchased volume of imported coal capitalizing on the price gap between domestic and international coal markets, secured more favorable coal purchase conditions through negotiations with suppliers, and reduced its average coal purchase price by rationalizing inventory arrangement based on production needs.

Energy Conservation and Environmental Protection. The Company attaches great importance to energy conservation and environmental protection. All the coal-fired generating units of the Company are equipped with desulphurization devices, and its coal-fired generating units equipped with denitrification devices account for more than 33% of power generation capacity of the Company.  The Company has also strengthened management over the operation and maintenance of environmental protection facilities, which has improved their operating efficiency and in-operation rate.

For the first half of 2012, the Company continued to maintain its leading position in the industry in terms of major technical and economic indicators.

Project Development and Construction. For the first half of 2012, the Company obtained approval for the Zhejiang Tongxiang Natural Gas Co-generation Project, the Wind Farm Phase I Project of Jiangsu Rudong Wind Power Co., Ltd., the Yunnan Chuxiong Natural Gas Cogeneration New Construction Project, and the Huaneng Coal Transit Base Project at Haimen Port in Shantou.

The following generating units of the Company commenced operation during the first half of 2012: Unit 2 (673 MW) of Shanxi Huaneng Zuoquan Power Plant, in which the Company owns a 60% equity interest; Unit 5 (1,000 MW) of Henan Huaneng Qinbei Power Plant Phase III, in which the Company owns a 60% equity interest; Unit 2 (20 MW) of Hunan Yongzhou Xiangqi Hydropower Station, which is wholly owned by the Company; Unit 2 (12.5 MW) and Unit 3 (12.5 MW) of Liaoning Suzihe Hydropower Station, which is wholly owned by the Company; and the second stage (44 MW) of Jiangsu Qidong Wind Power Plant Phase II, in which the Company owns a 65% equity interest.

Two generation units each with 100MW generating capacity of Shanxi Huaneng Yushe Power Plant, in which the Company owns a 60% equity interest, have been closed down.

By July 31, 2012, the Company had controlled generating capacity of 60,264 MW and equity-based generation capacity of 55,304 MW.

Although the overall economy in China is developing steadily, the national economic growth has slowed down and faces downward pressure from a number of factors such as the gloomy global economic outlook. The government is expected to maintain continuity and consistency of macroeconomic policies, further increase the intensity of anticipatory adjustments and fine-tuning measures, continue to adopt active fiscal policies and prudent monetary policies.

Electricity Market. Power consumption experienced slower growth for the first half of this year due to insufficient effective power demand nationwide affected by the slowdown of national economic growth. In the second half of 2012, the national economy is expected to improve as the various policies adopted by the Government to maintain steady growth will take effect gradually, and the growth of power consumption is expected to speed up with the coming of summer and winter peaks. In spite of various uncertainties such as operation of new generating units and increased power generation from hydropower facilities, the Company will strive to make the generating hours of its coal-fired generating units exceed local average.

Coal Market. Coal price experienced continuous drop within and outside China during the first half of 2012 due to sluggish global economy, slower growth of China's economy, and the reduced energy consumption per GDP unit according to the "Twelfth Five-year Plan". Coal inventories remain at a high level throughout China and coal price is expected to drop further in the second half of this year. The Company will closely monitor market changes, make efforts to expand supply channels, adjust the purchase strategy, optimize the purchase structure and import more coal. The Company will also take advantage of the existing eased-up railway capacity to establish direct railway transportation channels in an effort to control fuel costs.

Capital Market. The Chinese government will consistently implement positive fiscal policies and prudent monetary policies, make continued efforts to make these policies more target oriented and flexible, and further increase the intensity of anticipatory adjustments and fine-tuning measures. The People's Bank of China had reduced deposit reserve requirement ratio and lending interest rates both for two times, respectively, in 2012, which has significantly eased the capital pressure and financing costs of the Company.

Major Tasks for the Second Half of 2012.  The Company will enhance safe production management to ensure safe, consistent and economic operation of its generating units; strengthen power marketing efforts, refine working measures with a view to achieving "increased volume, consistent pricing, and improved efficiency", so as to ensure its overall leading position in terms of generating hours; enhance cost controls, strive to lower fuel costs, optimize debt structure and strive to reduce financial costs; with the focus on economic efficiency, improve construction project management and ensure sustainable, stable and sound development of the Company; promote and facilitate preparatory work of large coal-fired units in developed areas, coastal areas and areas along rivers, coal-electricity integrated projects, cost-efficient wind power projects and  gas-fired power plants in the developed areas, so as to lay a sound ground for the sustainable development of the Company.

For Huaneng Power International, Inc. and its subsidiaries' condensed consolidated interim balance sheet (unaudited), please visit: http://www.prnasia.com/sa/attachment/2012/07/20120731204705505098.30.2012-BS.pdf

For Huaneng Power International, Inc. and its subsidiaries' condensed consolidated interim statement of comprehensive income (unaudited), please visit: http://www.prnasia.com/sa/attachment/2012/07/20120731204648356196.30.2012-PL.pdf

About the Company

The Company is one of China's largest listed power producers with controlled generation capacity of 60,264 MW and equity-based generation capacity of 55,304 MW. The power plants of the Company are located in 19 provinces, municipalities and autonomous regions in China. The Company also has a wholly-owned power company in Singapore.

For enquiries, please contact:

Huaneng Power International, Inc. 
Ms. MENG Jing / Ms. ZHAO Lin  
Tel: +86-10-6608-6765 / +86-10-6322-6596
Fax: +86-10-6641-2321 
Email: [email protected]

Wonderful Sky Financial Group Limited
Ms. Sun Liang / Ms. Yolanda Wang / Ms. Sharon Xie / Ms. Sharon Lau
Tel: +852-2851-1038
Fax: +852-2865-1638
Email: [email protected] / [email protected] / [email protected] / [email protected]

SOURCE Huaneng Power International, Inc.