Guangdong Electric Power Made Dim Performance in Q1

Source: Trading Markets

Chinese electricity supplier Guangdong Electric Power Development Co., Ltd. (SZSE: 000539) reaped net profits attributable to equity shareholders of the parent of CNY 2.013 million in the first quarter of 2008, with a 99.09% fall year on year.

Earnings per share dropped 99.04% to CNY 0.0008, and return on equity merely reached 0.02%, decreasing 2.47 percentage points from the prior year. Meanwhile, the company achieved net margin of 0.23%, compared with 9.63% in the same period of 2007.

During the Chinese Spring Festival, the furious winter storm resulted in escalating fuel prices and coal transportation expenses, so the Shenzhen-listed electricity provider saw its operating costs jump 56.3% from a year-ago period.

In addition, total financial expenses of Guangdong Electric Power rocketed 172.59% year on year from January to March 2008, chiefly because the company and its two subsidiaries, Guangdong Yudean Jinghai Power Generation Co., Ltd. and Guangdong Maoming Zhenneng Thermoelectricity Co., Ltd., all had to face largely narrowing loans and capitalized interests.

In July 2007, the Zhanjiang Orimulsion Power Plant, in which Guangdong Electric Power takes 39% interest, suspended production, moreover, part of its power factories made a gloomy performance within the report period. Consequently, aggregate investment income of the company plummeted 183.94% from the first quarter of 2007.

On the contrary, the electricity producer saw its operating revenues hike 30.22% to nearly CNY 2.985 billion, that was because some newly-added power generation sets had started operation, according to the latest financial results released by Guangdong Electric Power.

By far, China has not announced the start-up of coal-power price link, a pricing mechanism that would establish a link between coal and power prices, and even not made an allowance to the thermal power industry. Besides, the country's steam coal prices are on the surge, so the Shenzhen-based company suffered great losses in the first three months of this year.

Just now, the National Development and Reform Commission (NDRC), China's macro-economy regulator, said that the average factory price of steam coal had stood at CNY 373.8 a ton by March 31, 2008, with a 21.84% growth year on year.

As of the end of last quarter, Guangdong Electric Power had had total assets of around CNY 24.58 billion, inching up 2.19% from the previous year, while its net assets per share had tumbled 2.33% to CNY 3.36. Meanwhile, Shareholders' equity reduced 2.24% to CNY 8.94 billion or so.

[More Guangdong and Pan PRD News]

Editor: Carrot Chan