Clp Holdings Limited · HKEX:2
Clp — FY2022 Earnings Presentation
56 slides from Clp's earnings presentation, February 2023
Slide 1: 2022 Annual Results Highlights
CLP Holdings 2022 Annual Results Highlights
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 Financial Performance and Outlook Strategy and Roadmap Installation of solar panel at the Hong Kong International Airport Appendices 2
Slide 4: Overview
Overview To be replaced Offshore LNG Terminal, Hong Kong 3
Slide 5: A fast-changing energy landscape
A fast-changing energy landscape Reduced pace of globalisation Heightened energy concerns Reliable & Safe Supply Increasing electricity demand through electrification Geopolitical tensions Energy Trilemma Reasonable Care for the Commodity price shocks Environment Acceleration of climate change Tarif
Slide 6: Group summary and outlook
Group summary and outlook Dependable earnings & resilient Disciplined capital management Positioned for energy and operations from core markets and reliable dividends just transition Strong performance from Hong Reallocation of capital and Delivered emissions reduction. Kong and China resources to H
Slide 7: 2022 highlights
2022 highlights Financial Highlights Operational Highlights Operating Earnings Change Safety & Customers Change Core markets HK$10,895 million 8% Total recordable injury rate (2) 0.25 0.02 (HK & Mainland China) Unplanned customer minutes lost in 5.69 mins 4.70 Group operating earnings HK$7,560 milli
Slide 8: Financial Performance and Outlook
Financial Performance and Outlook Qian’an III Wind Farm, Jilin, Mainland China 7
Slide 9: Operating earnings by region
Operating earnings by region HK$M 2022 2021 Change Hong Kong energy and related activities 8,666 8,442 3% Solid performance in core markets Mainland China 2,229 1,660 34% EnergyAustralia – before fair value movements (2,330) 251 n/a Lower generation and increased costs to settle Apraava Energy 193 2
Slide 10: Hong Kong
Hong Kong Higher earnings reflect progress of major projects Operating Earnings 8,442 8,666 (HK$m) 8,000 + 2.7% 6,000 4,000 2,000 0 2021 2022 Performance Outlook • Operating earnings up 2.7%: Return on higher fixed assets reflecting progress in major • Continued investment in current Development Pla
Slide 11: Mainland China
Mainland China Strong financial and strategic achievements and less exposure to coal Operating Earnings 2,500 2,229 (HK$m) 2,000 +34.3% 1,660 1,500 1,000 500 0 2021 2022 Performance Outlook • Operating earnings up 34.3%: Strong nuclear results and higher renewables. • Healthy renewables pipeline: 50
Slide 12: EnergyAustralia
EnergyAustralia Earnings impact due to tight market supply and operational challenges at thermal plants Operating Earnings – before fair value 1,000 251 movements 0 (HK$m) 2021 2022 -1,000 -2,581 -2,000 (2,330) -3,000 Performance Outlook • Operating earnings down: Lower generation at Mount Piper and
Slide 13: EnergyAustralia
EnergyAustralia CLP@ re s/nawh 00 200 100 Historical (spot) vs future (forward) wholesale NEM electricity prices 120 0220 @320 @i20 Giz q71 371 tz Giz p22 BN GAZ G12 OPI G32 NZS aq GIA GHZ GIZA A175 PIS GBI aA25 Historical Wem Weighted Average Spot Price = == Weighted ouarterty Forward Price as at 2
Slide 14: Apraava Energy
Apraava Energy Lower renewables and thermal contribution offset earnings from KMTL transmission Operating Earnings 250 221 (HK$m) 200 193 -12.7% 150 100 50 0 2021 2022 Performance Outlook • Operating earnings down: Lower renewables and thermal earnings offset strong, • Apraava Energy will be account
Slide 15: Free cash flow
Free cash flow Improvements in funds from operations and working capital movements in second half Free Cash Flows (HK$ billion) Capex and Dividends (HK$ billion) Capex 20 20 16.0 14.2 16.8 15 5.2 3.9 15 10 ( 1.6 ) 0.4 ( 0.5 ) 10.8 5 10.3 ( 2.9 ) 11.1 ( 1.1 ) 0 10 2021 2022 SoC Capex Other Capex and
Slide 16: Healthy financial situation
Healthy financial situation Healthy capital structure and liquidity position Net Debt Net Debt/Total Capital Liquidity Position Undrawn facilities and cash balance (HK$ billion) HK$54.9 billion 32.0% 40 37.9 36.4 35.9 8.6 4.3 8.3 30 Debt Maturity Debt Composition 23.2 3.7 Within 1 20 year Floating 3
Slide 17: Strategy and Roadmap
| | Strategy and S Roadmap wat CLP@ +z
Slide 18: Areas of strategic focus
Areas of strategic focus Grow in energy Decarbonise our Transform to a transition and operations utility of the future electrification Championing sustainability and its continued integration into our business 17
Slide 19: Growing demand with major new developments in this decade
Growing demand with major new developments in this decade Development of Innovation & Integration with Technology & other industries Greater Bay Area Enable new infrastructure Housing and land supply Northern Metropolis and Expansion of existing other developments CLP planned/proposed infrastructure
Slide 20: Energy security and decarbonisation in Hong Kong
Energy security and decarbonisation in Hong Kong Effective regulation under the Scheme of Control • Alignment with Government policy and HK Climate Action Plan • Long-term planning with investment certainty • Regulated returns • Regional collaboration • Regulatory stability Diversified generation, a
Slide 21: Building scale in Mainland China
Building scale in Mainland China Net-zero portfolio#: 28% renewables, 38% nuclear Mainland China Hong Kong India Southeast Asia and Taiwan Bobai Economic Rim Australia The Hexi Corridor • CLP is the largest external investor in the energy sector on the Mainland. • Product mix: zero-carbon electricit
Slide 22: Solutions to help our customers decarbonise
Solutions to help our customers decarbonise Transport Residential charging • Focus on customers and their energy transition Depot charging for fleets • Partner of choice for energy solutions Electrification of bus fleets Electric vehicle grid integration • Expanding energy offerings and diversifying
Slide 23: Decarbonising our operations
Decarbonising our operations Absolute Scope 1 and Scope 2 emissions of CLP’s Past and Projected Greenhouse Gas Emissions Intensity (2) CLP’s thermal generation assets # ktCO2 60,000 50,000 10% 40,000 23% 30,000 18% 20,000 15% 8% 10,000 11% 3% 13% 0 2018 2019 2020 2021 2022 Thermal assets # On an equ
Slide 24: Appendices
Appendices With the help of an EnergyAustralia installed microgrid, a Melbourne residential community will see lower energy bills 23
Slide 25: CLP Group – Financial highlights
CLP Group – Financial highlights 2022 2021 Change Revenue (HK$M) 100,662 83,959 +20% Operating Earnings (before EA Fair Value Movements) (HK$M) 7,560 9,851 -23% Operating Earnings (HK$M) 4,623 9,517 -51% Total Earnings (HK$M) 924 8,491 -89% Operating Earnings per share (HK$) 1.83 3.77 -51% Total Ear
Slide 26: Items affecting comparability
Items affecting comparability Hong Kong Profit from sale of properties HK$M 2022 2021 • Sale of properties relating to Argyle Street redevelopment Hong Kong Revaluation loss on investment property Hong Kong – Profit from sale of properties 80 - • Retail portion of the Laguna Mall in Hong Kong Mainla
Slide 27: CLP Group – Operating highlights
CLP Group – Operating highlights 2022 2021 Change Safety (Total recordable injury rate) (1) 0.25 0.23 +0.02 Reliability in Hong Kong (minutes lost pa) (2) 5.69 0.99 +4.70 Customer accounts (Thousand) Hong Kong 2,752 2,711 +41 Australia 2,462 2,443 +19 Electricity sent out (TWh) (3) 87.4 91.2 -4.2% G
Slide 28: CLP Group – Cash flow and financial structure
CLP Group – Cash flow and financial structure Cash Flow HK$M 2022 (1) 2021 (restated) • Lower free cash flow mainly reflected lower earnings from EnergyAustralia, Cash Flow unfavourable working capital movements and lower inflows from SoC operations in Consolidated EBITDAF 16,586 22,880 Hong Kong Le
Slide 29: Dividends
Dividends A history of returning cash to shareholders CLP Ordinary Dividend 1990 – 2022 and Shareholding by Category HK$ 3.5 Retail Interests 3.08 3.10 3.10 3.10 associated with 2.91 3.02 3.0 investors 2.80 35% 35% Kadoorie Family 2.70 2.62 As at 2.5 31 Dec 2022 1.19 1.19 1.21 1.21 1.21 1.14 1.09 1.
Slide 30: CLP Group – Financial obligations at a glance
CLP Group – Financial obligations at a glance HK$M 31 Dec 2022 31 Dec 2021 Increase in the Group’s net debt to HONG KONG total capital was driven by Total borrowings of CLPH, CLPP, CAPCO & PSDC 48,702 46,534 increased net debt to finance Minus: Bank balances and liquid funds (1,915) (6,431) EnergyAu
Slide 31: CLP Group – Credit ratings
CLP Group – Credit ratings CLP Holdings CLP Power CAPCO EnergyAustralia The credit ratings and rating outlooks of CLP Hong Kong entities had remained unchanged S&P Moody’s S&P Moody’s S&P Moody’s Moody’s in 2022. Long-term Rating In July 2022, S&P affirmed the A credit rating Foreign Currency A A2 A
Slide 32: CLP Group – Highlights of financing activities
For more information on CLP Group – Highlights of financing activities CLP Climate Action Finance Framework CLP Holdings: Ample liquidity in the Group at 31 December 2022 Mainland China: Continued refinancing at competitive terms • Undrawn facilities HK$31.6 billion, bank balances HK$4.3 billion • A
Slide 33: CLP Group – Loan balances by type and maturity
CLP Group – Loan balances by type and maturity Loan Balance - Type Loan Balance – Maturity (1) Proportion of Debt on Fixed HK$M HK$M and Floating Rate 60,000 60,000 2% 5% 18% 19% 50,000 25% 50,000 30% 11% 11% 40,000 40,000 17% 30% 39% 30,000 30,000 48% 52% Dec 2022 66% 61% 20,000 60% 20,000 54% Dec
Slide 34: Hong Kong – Growing business scale
Hong Kong – Growing business scale Generation Transmission Distribution Retail 10,445 MW > 16,600 km of transmission and 240 primary and > 15,400 34,824 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.752 million customer accounts During 2022: • Local electr
Slide 35: Hong Kong – Electricity sales, earnings and capex
Hong Kong – Electricity sales, earnings and capex Electricity sales Capital expenditure (Accrual basis) GWh 2022 2021 Change Proportion HK$M 2022 2021 Change Residential 10,113 10,525 3.9% 29% CLP Power 6,007 4,869 23% Commercial 13,233 13,423 1.4% 38% CAPCO * 6,566 6,353 3% Infrastructure & Public
Slide 36: 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 2023 High reliability HK$/kWh Unplanned customer minutes lost per year 4.0 London +103% 40 31 3.0 30 Tokyo +76% 2.0 20 16 13 Singapore +41% 10 5.7 * 1.0 0.5 0 1.0
Slide 37: Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume
Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume Tariffs Energy Cost HK¢/kWh 160 154.4 Average Net Tariff HK$M 140 30,000 27,761 120 100 +30% 1,106 93.7 Basic Tariff 21,345 80 7,001 60 62.0* Fuel Cost Adjustment 20,000 647 Others 40 6,838 Nuclear 20 13,366 Gas 0 -1.3 Special Rebate 10,000 Co
Slide 38: Mainland China – Financials
Mainland China – Financials HK$m 2022 2021 Renewables 610 545 - Wind 313 305 - Hydro 112 45 - Solar 185 195 Nuclear 1,965 1,908 - Daya Bay 970 963 - Yangjiang 995 945 Thermal 45 (572) - Shandong 7 (321) - Guohua 98 (149) - Fangchenggang (60) (102) Operating & development expenditure (343) (221) CLPe
Slide 39: Mainland China – Earnings, performance and opportunities
Mainland China – Earnings, performance and opportunities Earnings and performance Business development opportunities • Higher earnings from Nuclear was mainly due to higher • There are two grid-parity wind projects: the 50MW generation and higher market-based tariff of Yangjiang. Xundian II project
Slide 40: Mainland China – Market sales in 2022
Mainland China – Market sales in 2022 Province Projects with Market Sales (Equity MW) Guangxi FCG Thermal (1,806MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) Inner Mongolia Zhungeer Thermal (257MW) JILIN Hebei Sanhe Thermal (220MW) LIAONING Tianjin Panshan Thermal (207M
Slide 41: EnergyAustralia – Financials
EnergyAustralia – Financials HK$m 2022 2021 Adjusted Current Operating Income(1) Customer (Retail) (2) 1,131 910 Energy (Wholesale) (2) (2,879) 1,481 Enterprise (Corporate) (2) (1,315) (1,926) Total (3,063) 465 Fair value adjustments (3) (4,196) (477) Net finance costs (311) (126) Income tax credit
Slide 42: Impact of Mount Piper generation shortfall
Impact of Mount Piper generation shortfall Monthly Generation Output - Mt Piper NSW Average Spot Price by Month 2021 vs 2022 2021 vs 2022 450 2021 2022 Average Monthly Spot Price (A$/MWh) 1000 Av market 2021 2022 Shortfall of generation volume 400 contract price Difference between 2022 monthly Gener
Slide 43: EnergyAustralia – fair value movements
EnergyAustralia – fair value movements • The significant change in fair value movements of energy derivatives has resulted from a rapid escalation in forward NSW Forward Price Flat Swap ( Dec-21 vs Dec-22) prices. Dec-22 Dec-21 150 • Derivative contracts are marked-to-market at the end of the 130 In
Slide 44: EnergyAustralia – Wholesale market conditions
EnergyAustralia – Wholesale market conditions Year Ahead Swap Prices (1) • Australia had unprecedented increases in the cost of energy over the first 300 NSW half of 2022 (impacted by the war in Ukraine, extreme weather events VIC aging domestic power stations and limitations on domestic coal and ga
Slide 45: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Customer Account Numbers Sales Volume & Revenue 2022 2021 2022 2021 Customer Account Numbers (000s) Sales Volume & Revenue Electricity Electricity Electricity Gas Total Electricity Gas Total Gas (PJ) Gas (PJ) (TWh) (TWh) Mass Market 1,602.3 851.2 2,453.5 1,587.4
Slide 46: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Supporting customers experiencing 65% of bills issued in 2022 hardship – were E-bills 31k customers utilising EnergyAssist • Compared with 5% in 2015 programme • Improving 4pts since 2021 19 Ombudsman complaints/10k accounts 28.4pts improvement in • 69% reductio
Slide 47: Apraava Energy – Financials
Apraava Energy – Financials HK$m 2022 2021 Renewables 158 186 Thermal (Jhajjar) 46 98 Thermal (Paguthan & Corporate) (49) (70) Transmission 38 7 Operating earnings 193 221 Item affecting comparability – Jhajjar impairment - (148) Loss on sell down of Apraava Energy and related adjustment (3,537) - T
Slide 48: Apraava Energy – Performance and projects
Apraava Energy – Performance and projects Performance Expanding our renewable generation portfolio • Apraava Energy continued to sharpen its focus on the • Construction of the new 251MW wind energy project in investment and development of clean energy and power Sidhpur in Gujarat state continued to
Slide 49: Southeast Asia and Taiwan – Financials
Southeast Asia and Taiwan – Financials HK$m 2022 2021 Thermal 3 126 Renewables 16 61 Others (8) (14) Operating earnings 11 173 Gain on sale of Vietnam project - 249 Total earnings 11 422 SEA & Taiwan 48
Slide 50: Southeast Asia and Taiwan
Southeast Asia and Taiwan High coal costs at Ho-Ping compensated by revised tariff adjustment mechanism effective from 1 July 2022 Operating Earnings 200 (HK$m) 173 150 -93.6% 100 50 11 0 2021 2022 Performance Outlook • Lower earnings: Significantly reduced contributions from Ho-Ping & Lopburi • The
Slide 51: CLP Group – Generation and energy storage portfolio – Dec 2022
CLP Group – Generation and energy storage portfolio(i) – 31 Dec 2022 17,970 Equity MW and 5,098 MW Long Term Purchase (total 23,068 MW) ENERGYAUSTRALIA total 5,786MW* 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 / 1,
Slide 52: CLP Group – Renewable generation portfolio – Dec 2022
CLP Group – Renewable generation portfolio(i) – 31 Dec 2022 2,731 Equity MW and 881 MW Long Term Purchase (total 3,611MW) - 15.7% of CLP total generation portfolio MAINLAND CHINA 1,958 MW ENERGYAUSTRALIA 910 MW* APRAAVA ENERGY 713 MW Operational Operational Operational Wind 1,010 MW Wind 616 MW Wind
Slide 53: CLP Group – Generation and energy storage capacity by fuel mix
CLP Group – Generation and energy storage capacity(i) by fuel mix 23,068 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 6,089 26% 5,173 22% 916 4% Nuclear 2,685 12% 2,685 12% - - Wind 2,264 1
Slide 54: CLP Group – Energy sent out – 2022
CLP Group – Energy sent out – 2022 TWh 40 36.6 35.9 CLP 2022 Generation as Sent Out(1) 35 30 29.1 45% 26.1 24% 23% 48% 2022 25 2% 2021 20 18.1 18.2 2% 2% 5% 2% 5% 20% 15 22% 2021: 94.2 TWh 2022: 87.4 TWh 10 5.7 5.6 5 1.7 1.7 0 -5 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 Hong Kong Mainland C
Slide 55: Additional Resources
Additional Resources Scan or click on the QR codes to go to appropriate pages Annual Report Sustainability Climate-related Introductory Annual Results 2022* Report Disclosures Pack Presentation 2022* Report 2022* February 2023 February 2023 * To be published in early March 2023 54
Slide 56: Thank you
Thank you CLP@ +z