Huaneng Power Sees Weakest Profit Growth in 3 Years

Huaneng Power International Inc., China's largest power producer, posted its weakest annual profit growth in three years due to a slowing economy reducing electricity demand and asset writedowns.

 

The company posted a net profit 10.55 billion yuan ($1.7 billion) last year, up 0.2 percent from 2013, it said in a filing on the Shanghai stock exchange.

 

That was below a forecast of 12.0 billion yuan based on estimates from 20 analysts, according to Thomson Reuters SmartEstimate. The profit growth was the weakest since 2011, when net profit fell by more than 60 percent.

 

Total power generated by the company fell 7.3 percent to 294 billion kilowatt-hours (kWh), indicating weak power demand in China, where economic growth is expected to slow to around 7 percent this year.

 

Huaneng Power also took provisions for asset impairments, which reduced its 2014 net profit by 2.1 billion yuan.

 

Other Chinese power firms have also reported weak results and expect the going to be tough this year, they said earlier this month.

 

Datang International Power Generation Co Ltd , the listed arm of one of China's main power generators, posted its biggest net profit fall in six years, while China Resources Power Holdings Co Ltd posted its first net profit fall since 2011.

 

"We do not expect national power consumption to increase substantially in 2015," China Resources said in its statement.

 

Huaneng's announcement came after Hong Kong and China markets closed, with the company's Hong Kong shares up 0.9 percent, outperforming a 0.4 percent fall in the main Hang Seng index.