Clp Holdings Limited · HKEX:2
Clp — FY2023 Earnings Presentation
60 slides from Clp's earnings presentation, Feb 26, 2024
Slide 1: 2023 Annual Results Presentation
CLP Holdings 2023 Annual Results Presentation 26 February 2024
Slide 2: Disclaimer
Disclaimer Potential investors, analysts and shareholders of CLP Holdings Limited (the Company) and other recipients of this document are reminded that this document and any oral discussion made together with this document (the presentation) are provided for your information purposes only and you ma
Slide 3: Agenda
Agenda Overview TK Chiang, Chief Executive Officer Financial Performance and Outlook Nicolas Tissot, Chief Financial Officer Strategy and Roadmap TK Chiang, Chief Executive Officer Questions and answers CLP Power adopts a diversified fuel mix to ensure reliable and affordable power supply to Hong Ko
Slide 4: Overview
Overview The Floating Storage and Regasification Unit (FSRU), LNG carrier and offshore LNG terminal in Hong Kong 3
Slide 5: 2023 highlights
2023 highlights Solid financial performance driven by dependable Hong Kong and Mainland China businesses and progressive recovery at EnergyAustralia. Approval of the 2024-2028 Development Plan with HK$52.9 billion capital expenditure. Operational excellence and project execution across the Group, wi
Slide 6: 2023 highlights
2023 highlights Financial Highlights Operational Highlights Change Safety & Customers Change Operating Earnings (before fair value movements) HK$10,127 million 33% Total recordable injury rate (2) 0.18 0.07 Unplanned customer minutes lost 5.98 mins 0.29 min Total earnings HK$6,655 million 620% in Ho
Slide 7: Financial Performance and Outlook
Financial Performance and Outlook Meizhou Solar Power Station, Guangdong, Mainland China 6
Slide 8: 2023 financial overview
2023 financial overview Strong results amid backdrop of energy transition and macroeconomic pressures EBITDAF (1) Operating Earnings (1) Total Earnings Operating Earnings before fair value movements HK$10,127 million EA Customer impairment -HK$5.9 billion HK$23,611 million EA fair value movements +H
Slide 9: EBITDAF by business unit
EBITDAF by business unit Solid delivery and significant improvement at EnergyAustralia HK$M 3,669 (17%) 25,000 296 23,611 2,973 88 309 306 21,044 (9) 605 2,307 13 20,000 1,425 ( 23 ) ( 1,079 ) ( 284 ) 3,118 3,323 15,000 10,000 18,742 Taiwan Region & 18,120 Thailand Apraava Energy 5,000 EnergyAustral
Slide 10: Operating earnings before fair value movements
Operating earnings before fair value movements Solid organic growth in higher interest rates environment HK$M 30% 12,000 3,669 11 307 193 10,127 301 ( 504 ) 2,229 ( 769 ) 2,073 ( 97 ) ( 15 ) 150 91 8,000 7,602 8,708 8,823 Taiwan Region & 4,000 Thailand Apraava Energy EnergyAustralia Mainland China -
Slide 11: Operating earnings by business unit
Operating earnings by business unit Strong rebound in earnings supported by solid underlying performance across the portfolio HK$M 2023 2022 Change Hong Kong energy and related activities 8,823 8,708 1% Steady earnings from SoC net fixed asset growth, offset by higher interest costs Mainland China 2
Slide 12: Operating Earnings: Hong Kong
Hong Kong Stable contribution, continuing capital investments with foundations laid for 2024-28 1% 163 Operating Earnings 10,000 8,708 17 439 8,823 8,000 ( 453 ) ( 51 ) (HK$M) 6,000 4,000 2,000 - 2022 FX Return on higher Higher performance Higher Others* 2023 fixed assets incentives interest costs *
Slide 13: Operating Earnings: Mainland China
Mainland China Stable contributions from non-carbon portfolio and loss from thermal 12% 2,500 2,229 65 57 22 2,073 2,000 ( 29 ) ( 111 ) ( 160 ) 603 Operating Earnings 1,500 1,888 Renewables 1,000 (HK$M) 500 Nuclear - (11) Thermal (407) (500) Corporate expenses 2022 FX Scope ^ Nuclear Renewables Ther
Slide 14: Operating Earnings: EnergyAustralia
EnergyAustralia Progressive recovery led by energy segment while challenging retail operating environment 88% EBITDAF 4,000 838 2,000 3,804 Customer EBITDAF 2,938 Operating Earnings Energy EBITDAF - ( 512 ) ( 319 ) ( 12 ) ( 156 ) (754) (182) (1,469) Enterprise EBITDAF (HK$M) 97 (2,000) Interest, tax
Slide 15: Operating Earnings: Apraava Energy
Apraava Energy Delivering profitable growth 43% 400 45 11 2 301 300 25 82 Operating Earnings 193 34 41 Thermal 200 Transmission & Smart meter (HK$M) (9) 150 100 Renewables 66 Group adjustment - (38) Corporate expenses 2022 FX Scope and Renewables Thermal Transmission & Corporate 2023 (100) group Sma
Slide 16: Cash inflows and outflows
Cash inflows and outflows Strong rebound of cash flow and capital recycling more than covering dividends and capex HK$ billion 25.0 Cash inflows 23.5 22.3 1.6 Strong rebound of free cash flow(1) driven by: 20.0 3.7 19.1 • Higher EBITDAF 1.2 • Favourable working capital movements in Hong Kong SoC bus
Slide 17: Financial structure and liquidity
Financial structure and liquidity Healthy financial situation Net Debt Net Debt/Total Capital Liquidity Position (HK$ billion) Undrawn bank facilities Bank balances HK$52.3 billion 31.6% HK$30.9 billion HK$5.2 billion Debt Maturity Debt Composition Credit Ratings S&P Moody’s Within 1 Floating A A2 y
Slide 18: Strategy and Roadmap
Strategy and Roadmap Yangzhou Gongdao Solar, Jiangsu, Mainland China 17
Slide 19: Areas of strategic focus
Areas of strategic focus Decarbonise our portfolio and prosper in the energy transition Power Brighter Sustainable Investing in growth and capital strategy Tomorrows electrification Uplifting capability 18
Slide 20: Investing $52.9b to deliver government's policy priorities
Investing $52.9b to deliver government’s policy priorities Meeting housing and Powering Hong Kong’s Building a resilient development growth infrastructure development smart city Continuing Maintaining world 2024-28 Development Plan (HK$b) decarbonisation class reliability Power generation system 13.
Slide 21: Development Plan lays foundation for growth and stability
Development Plan lays foundation for growth and stability Growing asset base in support for Hong Kong’s continued economic growth, and low carbon journey Tariffs reduced in 2024 and Basic Tariff is projected to stay at moderate levels in the next 5 years World-class reliable and resilient electricit
Slide 22: Drivers of growth and energy transition
Drivers of growth and energy transition Mainland China Apraava Energy India Renewable energy build out Growth in transmission, renewables and ~2 GW smart meter 2x ~2 GW 3x Existing RE portfolio as at Feb 2024 Medium term Existing non carbon Medium term target portfolio as at Feb 2024 target • Focus
Slide 23: Uplifting our capability
Uplifting our capability Customer Innovative and experience agile in our Building a simplified modern approach A safe, future-ready digital first customer experience Simplification of the corporate workforce Digital and data to be close to the customer and support future growth Strategic workforce p
Slide 24: Decarbonising our operations
Decarbonising our operations CLP’s past and projected absolute greenhouse gas emissions of CLP’s past and projected greenhouse gas emissions intensity electricity sold and phase-out schedule of fossil fuel assets 2007 2017 2022 Before 2035 Before 2040 2020-2050 2050 and Launch of Climate Vision Capa
Slide 25: Questions and Answers
Questions and Answers Maintenance of overhead lines 24
Slide 26: Appendices
Appendices Xundian II wind farm in Yunnan, Mainland China 25
Slide 27: Financial highlights
Financial highlights 2023 2022 Change Revenue (HK$M) (1) 87,169 100,662 -13% Operating Earnings (before Fair Value Movements) (HK$M) 10,127 7,602 +33% Operating Earnings (HK$M) 12,252 4,623 +165% Total Earnings (HK$M) 6,655 924 +620% Operating Earnings per share (HK$) 4.85 1.83 +165% Total Earnings
Slide 28: Operating highlights
Operating highlights 2023 2022 Change Safety (Total recordable injury rate) (1) 0.18 0.25 -0.07 Reliability in Hong Kong (minutes lost pa) (2) 5.98 5.69 +0.29 Customer accounts (Thousand) Hong Kong 2,790 2,752 +38 Australia 2,442 2,462 -21 Electricity sent out (TWh) (3) 79.5 87.4 -9% Generation and
Slide 29: Items affecting comparability
Items affecting comparability Hong Kong Profit from sale of properties Sale of properties relating to Argyle Street redevelopment since Nov 2022. HK$ M 2023 2022 Hong Kong Revaluation loss on investment property Hong Kong – Profit from sale of properties 112 80 Retail portion of the Laguna Mall in H
Slide 30: Reconciliation of EBITDAF, ACOI and Operating Earnings
Reconciliation of EBITDAF, ACOI and Operating Earnings Adjusted Current Operating Income or ACOI • ACOI equals EBIT excluding items affecting comparability and HK$m 2023 2022 Change fair value movements, and includes the Group’s share in earnings from joint ventures and associates. Recurring EBITDAF
Slide 31: Reconciliation by business units
Reconciliation of EBITDAF, ACOI and Operating Earnings by business units Hong Kong energy and Taiwan Region and Other earnings & HK$M Mainland China EnergyAustralia Apraava Energy Group total related activities Thailand unallocated items 2023 Annual Recurring EBITDAF 18,742 3,118 2,307 306 309 (1,17
Slide 32: Cash flow and financial structure
Cash flow and financial structure Free Cash Flow HK$M 2023 2022 Change • Hong Kong: Improvement in operating inflow from SoC operations (+HK$8.1 billion) mainly due to Cash Flow partial recovery of under-collected fuel costs of HK$3.3 billion (2022: under-recovery of HK$2.4 billion) and lower fuel p
Slide 33: Dividends
Dividends A history of returning cash to shareholders CLP Ordinary Dividend 1990 – 2023 and Shareholding by Category HK$ 3.5 Interests Retail investors associated with 3.10 3.10 3.10 3.10 3.02 3.08 34% 35% Kadoorie Family 2.91 3.0 2.80 As at 2.70 31 Dec 2023 2.62 2.5 1.21 1.21 1.21 1.21 1.19 1.19 1.
Slide 34: Financial obligations at a glance
Financial obligations at a glance HK$M 31 Dec 2023 31 Dec 2022 HONG KONG Total borrowings of CLPH, CLPP, CAPCO & PSDC 47,968 48,702 Decrease in the Group’s net Minus: Bank balances and liquid funds (2,806) (1,915) debt to total capital was Net debt – Hong Kong 45,162 46,787 driven by lower net debt
Slide 35: Credit ratings
Credit ratings CLP Holdings CLP Power CAPCO EnergyAustralia S&P Moody’s S&P Moody’s S&P Moody’s Moody’s Long-term Rating The credit ratings and rating outlooks had remained unchanged in 2023. Foreign Currency A A2 A+ A1 AA- A1 Baa2 Outlook Stable Stable Stable Stable Stable Stable Stable In May, S&P
Slide 36: Highlights of financing activities
For more information on Highlights of financing activities CLP Climate Action Finance Framework CLP Holdings: Ample liquidity in the Group at 31 December 2023 Mainland China: Reduced interest rate and continued financing • The Group maintained adequate liquidity with undrawn bank facilities of HK$30
Slide 37: Loan balances by type and maturity
Loan balances by type and maturity Loan Balance – Maturity (1) Proportion of Debt on Fixed and Loan Balance – Type Floating Rate HK$M HK$M 60,000 60,000 5% 4% 19% 50,000 22% 50,000 30% 32% 11% 40,000 11% 40,000 43% 30% 27% 30,000 30,000 48% 52%57% Dec 2023 20,000 60% 57% 20,000 Dec 2022 10,000 10,00
Slide 38: Hong Kong – Growing business scale
Hong Kong – Growing business scale Generation Transmission Distribution Retail 10,445 MW > 16,900 km of transmission and 241 primary and > 15,500 35,392 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.790 million customer accounts During 2023: • Local electr
Slide 39: Hong Kong – Electricity sales, earnings and capex
Hong Kong – Electricity sales, earnings and capex Electricity sales Capital expenditure (Accrual basis) GWh 2023 2022 Change Proportion HK$M 2023 2022 Change Residential 9,929 10,113 1.8% 28% CLP Power Hong Kong 6,759 6,007 13% Commercial 13,673 13,233 3.3% 39% CAPCO * 4,911 6,566 25% Infrastructure
Slide 40: Hong Kong – Tariff, reliability, fuel prices and environmental improvement
Hong Kong – Tariff, reliability, fuel prices and environmental improvement Low tariff Residential Tariff % Increase from Jan 2021 to Jan 2024 High reliability Unplanned customer minutes lost per year HK$/kWh London +74% 4.0 40 3.0 Singapore +47% 30 26 20 2.0 13 New York +25% 6.0* 10 10 1.0 0.2 Sydne
Slide 41: Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume
Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume Tariffs Energy cost HK¢/kWh 160 HK$M 140 142.9 Average Net Tariff -4% 30,000 27,761 26,776 120 231 316 100 96.6 Basic Tariff 7,876 80 20,000 8,082 Others 60 46.3* Fuel Cost Adjustment Non-carbon 40 13,366 13,707 Gas 20 0.0 Special Rebate 10,00
Slide 42: Mainland China – Financials (HK$)
Mainland China – Financials (HK$) HK$M Operating/Total Earnings ACOI 2023 2022 2023 2022 Renewables 603 610 939 999 - Wind 308 313 462 475 - Hydro 101 112 162 210 - Solar 194 185 315 314 Nuclear 1,888 1,965 2,050 2,135 - Daya Bay 943 970 992 1,021 - Yangjiang 945 995 1,058 1,114 Thermal (11) 45 (9)
Slide 43: Mainland China – Financials (RMB)
Mainland China – Financials (RMB) RMB M Operating/Total Earnings ACOI 2023 2022 2023 2022 Renewables 546 526 852 862 - Wind 279 270 418 410 - Hydro 91 97 147 181 - Solar 176 159 287 271 Nuclear 1,711 1,695 1,858 1,842 - Daya Bay 855 837 899 881 - Yangjiang 856 858 959 961 Thermal (10) 39 (9) 36 - Sh
Slide 44: Mainland China – Earnings, performance and opportunities
Mainland China – Earnings, performance and opportunities Earnings and performance Business development opportunities • Strong performance for nuclear despite a major outage in • Solar: The 100 MW Huai’an Caoyun solar project and 100MW Yixing Daya Bay and lower tariff in Yangjiang, supported by solar
Slide 45: Mainland China – Market sales in 2023
Mainland China – Market sales in 2023 Province Projects with Market Sales (Equity MW) Yunnan Xundian Wind (99.5MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) Inner Mongolia Zhungeer Thermal (257MW) Hebei Sanhe Thermal (220MW) Tianjin Panshan Thermal (207MW) Liaoning Lingyuan Solar (17MW) Suizhong
Slide 46: EnergyAustralia – Financials
EnergyAustralia – Financials HK$M Local Currency 2023 2022 2023 2022 HK$M HK$M A$M A$M EBITDAF (before items affecting comparability) Customer (Retail) (1) 838 1,409 162 260 Energy (Wholesale) (1) 2,938 (904) 564 (167) Enterprise (Corporate) (1) (1,469) (1,200) (282) (221) Total EBITDAF 2,307 (695)
Slide 47: Wholesale Market Conditions
Wholesale Market Conditions Physical Supply and Demand: Financial Spot Price: 1. Reduction in Operational Demand 3. Reduction in Spot Market volatility from 2022 Increasing rooftop PV capacity continues to drive down operational demand. After seeing prices ease significantly in Q1 2023 compared to 2
Slide 48: EnergyAustralia Outlook
EnergyAustralia Outlook Calendar Year NSW Swap Prices over time The Market $300 CAL 2020 CAL 2021 CAL 2022 CAL 2023 • Australia targeting 82% of renewable energy by 2030. CAL 2024 CAL 2025 CAL 2026 $250 • Wholesale price easing. • Retail pricing rising. Swap Price $/MWh $200 $150 $100 EnergyAustrali
Slide 49: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Customer account numbers Sales volume & revenue 2023 2022 2023 2022 Customer Account Numbers (000s) Sales Volume & Revenue Electricity Electricity Electricity Gas Total Electricity Gas Total Gas (PJ) Gas (PJ) (TWh) (TWh) Mass Market 1,593.8 843.8 2,437.6 1,602.3
Slide 50: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Supporting customers experiencing 68% of bills issued in 2023 hardship – were E-bills. 52k customers utilising EnergyAssist • Compared with 5% in 2015. programme. • Improving 3pts since 2022. 26 Ombudsman complaints/10k accounts. 17pts improvement in • 57% reduc
Slide 51: Apraava Energy – Financials
Apraava Energy – Financials HK$M Local Currency (Rs M) 2023 2022 2023 2022 Renewables 150 477 1,581 4,799 Thermal (Jhajjar) 82 281 865 2,827 Transmission 44 208 464 2,093 Smart meter (3) - (32) - Group adjustment & Corporate 33 (102) 348 (1,026) expenses (1) ACOI 306 864 3,226 8,693 Renewables 150 1
Slide 52: Apraava Energy – Performance and projects
Apraava Energy – Performance and projects Performance Expanding our renewable generation portfolio • Continued strong performance of renewable and transmission portfolios. • Continued progress on construction of the new 251MW Sidhpur wind • Jhajjar Power Station, continued to uphold its position as
Slide 53: Taiwan Region and Thailand – Operating Earnings
Taiwan Region and Thailand – Operating Earnings Coal margin at Ho-Ping improved by full year contribution of the revised tariff adjustment mechanism 400 2,691% 294 3 307 300 (1 ) Operating Earnings 200 297 (HK$M) 100 Thermal 11 Solar - 15 0 (5) Corporate expenses (100) 2022 FX Thermal Solar Corporat
Slide 54: Taiwan Region and Thailand – Financials
Taiwan Region and Thailand – Financials HK$M Local Currency (M) 2023 2022 2023 2022 HK$M HK$M M M Thermal 297 3 NT$1,178 NT$12 Renewables 17 18 THB75 THB80 Corporate expenses (1) (5) (8) ACOI 309 13 Thermal 297 3 NT$1,178 NT$12 Renewables 15 16 THB68 THB72 Corporate expenses (1) (5) (8) Operating ea
Slide 55: Generation and energy storage portfolio – 31 Dec 2023
CLP Group – Generation and energy storage portfolio(i) – 31 Dec 2023 18,123 Equity MW and 5,168 MW Long Term Purchase (total 23,291 MW) ENERGYAUSTRALIA total 5,859MW* HONG KONG total 8,268MW* Operational Operational Yallourn 1,480 / 1,480 (c) Castle Peak – A & B 4,108 / 4,108* (c) Mount Piper 1,430
Slide 56: Renewable generation portfolio – 31 Dec 2023
CLP Group – Renewable generation portfolio(i) – 31 Dec 2023 2,871 Equity MW and 861 MW Long Term Purchase (total 3,732MW) - 16.0% of CLP total generation portfolio MAINLAND CHINA 2,100 MW ENERGYAUSTRALIA 889 MW* APRAAVA ENERGY 712 MW Operational Operational Operational Wind 1,059 MW Wind 595 MW Wind
Slide 57: Generation and energy storage capacity by fuel mix
CLP Group – Generation and energy storage capacity(i) by fuel mix 23,291 MW Attributable to CLP Group Operational Under construction Capacity by Total MW % MW % MW % Energy Type (a) + (b) (a) (b) Coal 9,719 42% 9,719 42% - - Gas 6,093 26% 5,173 22% 920 4% Nuclear 2,685 12% 2,685 12% - - Wind 2,391 1
Slide 58: Energy sent out – 2023
CLP Group – Energy sent out – 2023 TWh 40 38.3 CLP 2023 Generation as Sent Out(1) 35 31.4 30 41% 25 24.8 45% 23.6 25% 24% 2023 20 18.2 2% 2022 16.5 2% 2% 5% 15 2% 6% 22% 24% 2022: 87.4 TWh 2023: 79.5 TWh 10 5.6 5.0 5 1.7 1.8 0 -5 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 Hong Kong Mainland C
Slide 59: Additional Resources
Additional Resources Scan or click on the QR codes to go to appropriate pages Annual Report Sustainability Report Climate Vision 2050 Introductory Pack 2023* 2023* 2024 Edition* February 2024 Interim Results Presentation August 2023 Website: www.clpgroup.com * To be published in early March 2024. 58
Slide 60: Thank you
Thank you You can access this presentation and other materials through our website or CLP IR App which can be If you have any questions, downloaded onto your mobile device by clicking here or by please contact IR team or scanning this code below. email ir@clp.com.hk 59