Profitable Huaneng warns of concerns
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Huaneng Power International Ltd, China's top listed electricity producer, returned to profit in 2009 thanks to increasing power generation and lower coal prices, but warned of looming uncertainties.
The power utility generated net earnings of 5.08 billion yuan (US$747 million), it said in a filing to the Shanghai Stock Exchange yesterday. That reversed a net loss of 3.56 billion yuan in 2008 - its first annual loss.
"Against the backdrop of higher power prices and lower coal prices, the growth in power generation translated into a profit increase," said Zou Xuyuan, a China Galaxy Securities Co analyst.
Huaneng's power generation rose 10.23 percent last year and revenue gained 10.45 percent annually to 79.74 billion yuan in 2009.
But the company said it is facing uncertainties such as reform of the power system and coal supply. It estimated the coal supply shortage to continue in 2010. Coal prices are expected to be more unstable in 2010 due to the integration of domestic coal resources and uncertainties in international energy prices and shipping costs, the utility said.
"Fuel costs are the key that would affect the firm's profitability this year," said Zou.
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