Consolidated Operating Revenue: RMB184.396 million, a decrease of 3.62%. Net Profit Attributable to Shareholders: RMB10.421 billion. Net Profit Attributable to Parent (after non-recurring items): RMB10.028 billion, an increase of 6.73%. Earnings Per Share: RMB0.53. Domestic On-Grid Power Sales: 341.24 billion kilowatts per hour, an increase of 1.14%. Average Tariff: RMB496.27 per megawatt hour, a decrease of 2.63%. Unit Fuel Cost: RMB303.47 per megawatt hour, a decrease of 8.74%. Installed Capacity: 140 gigawatts, with wind and solar capacity at 33.748 gigawatts. Low-Carbon Clean Energy Capacity: 33.8% of total capacity. Tuas Power Profit Before Tax: RMB2.247 billion, a decrease of RMB1.394 billion. Sahiwal Power Plant Profit Before Tax: RMB670 million, an increase of RMB241 million.

Warning! GuruFocus has detected 8 Warning Signs with HUNGF.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Huaneng Power International Inc (HUNGF) achieved a net profit attributable to shareholders of RMB10.421 billion, with a 6.73% increase in net profit after deducting non-recurring profits and losses. The company reported a slight year-on-year increase in thermal power generation, driven by increased electricity demand and tight supply in certain regions. Huaneng Power International Inc (HUNGF) added 5,278.6 megawatts of new capacity, including significant contributions from wind and solar power, enhancing its renewable energy portfolio. The unit fuel cost decreased by 8.74% year-on-year, reflecting effective cost control measures and optimization of coal supply. The Sahiwal Power Plant in Pakistan achieved a record high profit before tax of RMB670 million, demonstrating strong performance in overseas operations.

Negative Points

Consolidated operating revenue decreased by 3.62% in the first three quarters, indicating challenges in revenue growth. The average tariff for domestic on-grid power decreased by 2.63%, impacting revenue from power sales. Tuas Power in Singapore experienced a significant decrease in profit before tax by RMB1.394 billion due to a decline in wholesale and retail tariffs. The company faced increased non-operating expenses, including RMB690 million due to typhoon damage and other impairments. Wind and solar curtailment rates increased, with wind curtailment at 5.23% and solar at 4.16%, indicating challenges in fully utilizing renewable capacity.

Q & A Highlights

Q: Could you provide the third quarter average tariff for thermal, wind, and solar, and discuss the unit fuel cost trends? What is the company's cost guidance for 2025? A: The average tariff for coal was RMB480.98 per megawatt hour, gas RMB711.67, wind RMB519.03, solar RMB430.2, hydro RMB360.86, and biomass RMB749. For 2025, we expect coal prices to decrease due to improved supply and demand dynamics. The unit fuel cost for the third quarter was RMB303.47 per kilowatt hour, down from RMB332.52 last year.

Story Continues

Q: What is the company's CapEx for the first three quarters, and what is the forecast for the full year 2024? A: The capital expenditure for the first three quarters was around RMB33 billion, with RMB21.8 billion allocated to renewable projects. We aim to maintain our annual target of adding 10 gigawatts of renewable capacity.

Q: Can you provide details on the company's asset impairment in the third quarter? A: The asset impairment for Jilin power plant was about RMB727 million, and for Nong'an biomass, it was RMB409 million. We will continue to evaluate impairment signs based on operating status and government policies.

Q: What is the company's strategy for signing power purchasing agreements for 2025? A: We aim to ensure that the power signed is not less than the regional capacity share and that tariffs are not below the market average. The coal price is expected to decrease, and renewable participation in the market will increase, putting downward pressure on tariffs.

Q: How did the Tuas Power perform in the third quarter, and what are the expectations for the fourth quarter and 2025? A: Tuas Power's profit in the third quarter was RMB523 million, a decrease due to stable fuel supply and market conditions. We will adjust our strategy to maintain stable profits and optimize trading strategies in response to market changes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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