Profit Attributable to Equity Holders of the Company Rose 24.62% to RMB6.071 Billion
BEIJING, April 3 /Xinhua-PRNewswire-FirstCall/ -- Huaneng Power International, Inc. ("Huaneng International" or the "Company") (NYSE: HNP; HKEx: 902; SSE: 600011) today announced its annual operating results for the year ended 31 December 2006 prepared in accordance with International Financial Reporting Standards ("IFRS"). Consolidated operating revenue amounted to RMB44.301 billion (equivalent to approximately USD5.673 billion, based on the USD-RMB exchange rate of USD1 to RMB7.8087 as at 31 December 2006), representing a 10.23% increase as compared to 2005. Profit attributable to equity holders of the Company amounted to RMB6.071 billion (equivalent to approximately USD777 million), representing a 24.62% increase as compared to 2005. Earnings per share amounted to RMB0.50 (equivalent to approximately USD0.06), and the earnings per ADS amounted to RMB20 (equivalent to approximately USD2.56). T he Board of Directors (the "Board") of the Company is satisfied with the Company's operating results last year.
The Board proposed to declare a 2006 cash dividend of RMB0.28 for each ordinary share of the Company held by shareholders.
In 2006, The Company attained the anticipated objectives in terms of safe production, operating management, project construction and environmental protection and achieved steady growth in the operating results for the whole year through joint efforts of the management of the Company and all its staff continuous development, seizing opportunities and overcoming difficulties despite unfavorable factors including continued high coal prices, a decline in utilization rates of generating units and intensifying competition in the power market.
In 2006, the operating power plants of the Company and its subsidiaries achieved a total power generation of 159.897 billion kWh on a consolidated basis, representing an increase of 6.24% over the previous year. The growth in power generation is, on the one hand, attributable to its adoption of effective marketing strategies, thereby giving full play to the advantages of the Company including having large-capacity single units at its power plants, its highly cost-efficient, environmental friendly, and relatively low operating costs, thereby obtaining a relatively large market share amidst market competition. On the other hand, the commencement of commercial operation of new generating units and their safe and stable operation played a key role in boosting the Company's growth in power generation.
In terms of environmental protection, the Company has, through measures such as enhancing its energy-saving management, strengthened its effort on facility maintenance and repair, and sufficiently utilized power-saving technologies in 2006, and reported an improvement in the technical and economic indices of the Company as compared to the corresponding period of the previous year. In 2006, the average coal consumption rate for power generated was 316.39 gram/kWh, while the average coal consumption rate for power sold was 335.60 gram/kWh. The weighted average house consumption rate was 5.69%. The average availability factor was 93.61%, and the average capacity factor was 66.88%. All technical and economic indices remained at a satisfactory level.
As for fuel cost control, the Company actively adopted various measures to control fuel costs, achieving significant results in ensuring transportation capacity, rationalizing inventory balance and improving coal quality, thereby controlling the increase in the Company's unit fuel cost at 0.75%.
As for asset acquisitions, the Company entered into an asset transfer agreement with China Huaneng Group ("Huaneng Group") on 28th September 2006 to acquire from Huaneng Group its 5% equity interest in Qinbei Power Plant. The Company paid a consideration of RMB65.75 million from its internal cash surplus. These transactions have been effected from January 2007.
Regarding projects development and construction, a total number of 18 coal-fired and hydropower generating units with an aggregate installed capacity of 7,150MW were put into commercial operation in 2006, thus laying a foundation for expanding the Company's operating scale, as well as consolidating and enhancing its market share and revenues. Generating unit No.1 at Huaneng Yuhuan Power Plant was put into commercial operation on 28th November 2006, six months ahead of schedule, and has succeeded in commercially running of the both generating units during the year. Huaneng Yuhuan Power Plant became the first domestically made 1,000MW level ultra-supercritical coal-fired power generating unit put into commercial operation in China. The commercial operation of Yuhuan Power Plant has a significant meaning for China's power generating enterprises in terms of enhancing the efficiency of coal-fired generating units, lowering emission of pollutants and realizing adjustments in the thermal power structure. At the beginning of 2007, a 600 MW generating unit of Luohuang Power Plant Phase III was put into commercial operation. In addition, as a result of closure and suspension of small scale generating units and technological upgrades on existing generating units, the Company's total generation capacity on an equity basis has reached 28,187 MW as at 31st March 2007.
In 2006, Section 404 of Sarbanes-Oxley Act began to apply to foreign companies listed in the US. With the joint efforts by all staff, the Company has attained great achievement in its internal control over financial reporting work and passed the audit conducted by external auditor. PricewaterhouseCoopers has issued an unqualified audit report for the internal control work of the Company in 2006. The Company is among the first batch of PRC enterprises listed in the US to fulfill the internal control over financial reporting requirements of Section 404 of Sarbanes-Oxley Act.
Year 2007 is a year full of both opportunities and challenges.
Regarding the power market, a rapid growth in the national economy and continued improvement in the people's living standard will drive a continued rapid growth in power demand, thereby providing the Company with opportunities for project development and expansion of its operating scale. However, due to an increasing number of power projects put into operation during the past few years leading to intensified market competition, the utilization hours of generating units are expected to further decline.
As the State keeps on implementing the policies of "replace small coal-fired generating units with large ones" and "energy saving and emission reduction", the Company will benefit therefrom given its advantages in "large-capacity generating units, high efficiency and extensive service area", thereby enhancing the competitiveness of the Company. However, how to seize the opportunity and leverage the relevant policies, whereby turning the competitive advantages into speed of development and actual operating results, will be a challenge for the management of the Company.
For the coal market, the general balance in the demand and supply of coal and relieved tension in the capacity of coal transportation will provide favorable conditions for the supply of coal to the Company. However, since the prices in the major coal supply agreements will have significant increase and the spot-market coal prices still hover at a high level, the Company will still face a challenge for controlling its fuel cost. The Company will make its best efforts to control its fuel cost and strive to keep the rise of the unit fuel cost at around 5%.
In summary, the Company is confident in seizing the opportunity, and taking the challenge, strive to achieve good operating results as a return to shareholders.
The Company's main work objectives for 2007 are as follows:
1. To strengthen production safety management and to ensure safe, stable
and increasing power generation;
2. To strengthen sales and marketing and cost control, ensuring an
increase in revenues and a reduction in expenditure and enhancing
operating efficiency;
3. To strengthen coal purchase management to ensure safe, stable and
effective coal supply;
4. To actively push forward energy saving and environmental protection
work, strengthening energy saving and technology renovation and
continuously reducing various consumption rates of the generating
units;
5. To strengthen the management of projects under construction and to
ensure the projects will be completed in high quality, fast
pace and low cost and in accordance with schedules;
6. To seek suitable opportunities to acquire quality assets and ensure
a long-term, stable and healthy development of the Company;
7. To encourage management innovation and to effectively carry out
internal control mechanism.
Huaneng Power International, Inc. develops, constructs, operates and manages large-scale power plants in China nationwide, with a total generation capacity of 28,187MW on an equity basis. The Company wholly owns seventeen operating power plants, and has controlling interests in twelve operating power companies and minority interests in five operating power companies. Currently, it is the largest listed power producer in China.
Encl: The 2006 consolidated financial information of the Company and its subsidiaries prepared under IFRS.
HUANENG POWER INTERNATIONAL, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (AUDITED)
AS OF DECEMBER 31, 2006
(Amounts expressed in thousands)
As of
As of December 31,
December 31, 2006 2005
Rmb US$ Rmb
ASSETS
Non-current assets
Property, plant and equipment,
net 90,444,225 11,582,495 78,997,297
Investment in associates 5,418,213 693,869 4,593,984
Investments in subsidiaries -- -- --
Available-for-sale investment 1,458,759 186,812 1,033,225
Land use rights 2,013,480 257,851 1,679,765
Deferred income tax assets 98,429 12,605 64,075
Goodwill 671,796 86,032 671,796
Other non-current assets 269,404 34,499 336,379
Total non-current assets 100,374,306 12,854,163 87,376,521
Current assets
Inventories, net 2,121,489 271,683 2,311,357
Other receivables and assets,
net 615,488 78,821 855,952
Accounts receivable,net 6,977,493 893,554 6,022,426
Financial assets at fair value
through profit or loss 100,180 12,829 --
Due from HIPDC -- -- 21,847
Due from subsidiaries -- -- --
Due from other related parties 621 80 --
Restricted cash 203,863 26,107 201,276
Temporary cash investments -- -- 2,652
Cash and cash equivalents 3,207,192 410,720 2,647,665
Total current assets 13,226,326 1,693,794 12,063,175
Total assets 113,600,632 14,547,957 99,439,696
EQUITY AND LIABILITIES
Capital and reserves attributable to
equity holders of the Company
Domestic shares,par value
Rmb1.00 each, in form of legal
person shares -- -- 8,500,000
A Shares, par value of Rmb1.00
each 9,000,000 1,152,561 500,000
Overseas Listed Foreign Shares,
par value Rmb1.00 each 3,055,383 391,279 3,055,383
Additional paid-in capital 8,988,973 1,151,148 8,988,107
Dedicated capital 5,454,467 698,512 4,899,429
Fair value gains from available-
for-sale investment, net of tax 998,825 127,912 636,964
Retained earnings --
Proposed dividend 3,375,507 432,275 3,013,846
Others 12,584,354 1,611,581 10,443,745
43,457,509 5,565,268 40,037,474
Minority interests 7,151,183 915,797 6,106,713
Total equity 50,608,692 6,481,065 46,144,187
Non-current liabilities
Long-term loans from a
shareholder 2,800,000 358,574 2,800,000
Long-term bank loans 32,065,840 4,106,425 25,711,255
Other long-term loans 232,779 29,810 351,009
Deferred income tax liabilities 1,078,897 138,166 1,157,775
Other non-current liabilities 309,930 39,691 168,328
Total non-current
liabilities 36,487,446 4,672,666 30,188,367
Current liabilities
Accounts payable and other
liabilities 8,375,705 1,072,612 6,905,240
Taxes payable 1,180,318 151,154 1,131,284
Due to Huaneng Group 44,592 5,711 50,720
Due to HIPDC 79,730 10,210 53,230
Due to a subsidiary -- -- --
Due to associate 83,512 10,695 --
Due to other related parties 65,795 8,426 29,620
Salary and welfare payables 441,590 56,551 251,949
Short-term bonds 5,077,577 650,246 4,938,250
Short-term loans 7,823,720 1,001,923 6,580,870
Current portion of long-term
bank loans 3,140,393 402,166 2,653,339
Current portion of other long-
term loans 191,562 24,532 512,640
Total current
liabilities 26,504,494 3,394,226 23,107,142
Total equity and
liabilities 113,600,632 14,547,957 99,439,696
For the convenience of the reader, translation of amounts from Renminbi
(Rmb) into United States dollars (US$) has been made at the rate of
US$1.00 = Rmb7.8087 announced by the People's Bank of China on December
31, 2006. No representation is made that Renminbi amounts could have
been, or could be, converted into United States dollars at that rate as
of December 31 2006, or at any other certain rate.
HUANENG POWER INTERNATIONAL, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (AUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2006
(Amounts expressed in thousands, except per share data)
For the year ended December 31,
2006 2005
Rmb US$ Rmb
Operating revenue, net 44,301,403 5,673,339 40,190,004
Sales tax (148,057) (18,960) (113,475)
Operating expenses:
Fuel (22,608,151) (2,895,252) (21,202,952)
Maintenance (1,306,888) (167,363) (1,165,374)
Depreciation (6,719,158) (860,471) (6,167,692)
Labor (2,886,767) (369,686) (2,487,098)
Service fees to HIPDC (140,771) (18,027) (141,102)
Others (1,933,200) (247,570) (1,903,345)
Total operating
expenses (35,594,935) (4,558,369) (33,067,563)
Profit from operations 8,558,411 1,096,010 7,008,966
Interest income 51,910 6,648 53,685
Interest expense (1,591,033) (203,751) (1,426,609)
Bank charges and exchange
gain / (losses), net 67,819 8,684 248,533
Total financial
expenses (1,471,304) (188,419) (1,124,391)
Share of profit of associates 790,629 101,250 644,376
Investment income, net 128,595 16,468 60,872
Other income, net 10,442 1,337 2,385
Profit before tax 8,016,773 1,026,646 6,592,208
Income tax expenses (1,127,699) (144,415) (1,044,297)
Profit for the year 6,889,074 882,231 5,547,911
Attributable to:
Equity holders of the
Company 6,071,154 777,486 4,871,794
Minority interests 817,920 104,745 676,117
6,889,074 882,231 5,547,911
Dividends paid 3,013,846 385,960 3,022,096
Proposed dividend 3,375,507 432,275 3,013,846
Proposed dividend per share 0.28 0.04 0.25
(expressed in RMB per share)
Earnings per share for profit
attributable to the equity
holders of the Company
during the year
(expressed in RMB per share)
- basic 0.50 0.06 0.40
- diluted 0.50 0.06 0.40
For the convenience of the reader, translation of amounts from Renminbi
(Rmb) into United States dollars (US$) has been made at the rate of
US$1.00 = Rmb7.8087 announced by the People's Bank of China on December
31, 2006. No representation is made that Renminbi amounts could have
been, or could be, converted into United States dollars at that rate as
of December 31 2006, or at any other certain rate.
For enquiries, please contact:
Ms. Meng Jing / Ms. Zhao Lin Ms. Sally Wong / Ms. Jane Kun
Huaneng Power International, Inc. Rikes Communications Limited
Tel: +86-10-6649-1856 / 1866 Tel: +852-2520-2201
Fax: +86-10-6649-1860 Fax: +852-2520-2241
Email: ir@hpi.com.cn
