A subsidiary of one of China’s five-biggest power generators saw its profit spike almost 50% in the first half of 2020, thanks to slumping fuel prices and despite widespread business shutdowns during the Covid-19 pandemic.
Shanghai-listed Huaneng Power International Inc., which is owned by energy giant China Huaneng Group, saw its first-half profit jump 49.7% year-on-year to 5.73 billion yuan ($828 million), according to an interim report filed to the Shanghai Stock Exchange on Wednesday.
However, the company’s revenue shrank 5.21% compared with the same period last year to 79.1 billion yuan, mostly due to declining domestic electricity sales.
As of June 30, Huaneng had a power generation capacity of 108 megawatts (MW) in China, with coal power making up 81.8%.
According to the report, declining coal prices led to the costs of Huaneng’s fossil fuel power stations to drop 7.73% year-on-year in the first half, pushing up profits.
Huaneng also posted a 54% year-on-year jump in cash outflow on investment activities as it stepped up purchases and construction of clean energy assets.
The company has 10.98 MW of natural gas power generation capacity, 6.38 MW of wind power generation capacity and 1.97 MW of solar power generation capacity.
It warned in the report that it may face fiercer competition selling electricity in the future with the risk of falling prices, as China is promoting power trading across the nation to replace previous government-set prices in a bid make the sector more market-oriented.
Contact reporter Lu Yutong (yutonglu@caixin.com)
