Clp Holdings Limited · HKEX:2
Clp — H1 2021 Earnings Presentation
55 slides from Clp's earnings presentation, Aug 2, 2021
Slide 1: CLP Holdings 2021 Interim Results Analyst Briefing
CLP Holdings 2021 Interim Results Analyst Briefing 2 August 2021 Information Classification: Confidential/Proprietary 1
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 & Strategy Richard Lancaster Chief Executive Officer Financial Performance & Outlook Nicolas Tissot Chief Financial Officer 3
Slide 4: First Half Overview
First Half Overview CLP has joined the Government’s Outreach Vaccination Programme to facilitate employees to get vaccinated against COVID-19 on company premises 4
Slide 5: Investing in the energy transition across our portfolio
Investing in the energy transition across our portfolio • Progress on decarbonisation • Safe and reliable operations and customer service • Sustained investment to reduce carbon emissions • Pursue growth with a focus on non-carbon investments in the Greater Bay Area • New, flexible, clean energy pro
Slide 6: Lower Operating Earnings, dependable Dividend, reliable Operations
Lower Operating Earnings, dependable Dividend, reliable Operations Operating Earnings & Op. EPS Dividend & Yield HK$5,698 million 1st & 2nd interim dividend HK$0.63 7.0% HK$2.26 per share Dividend yield (1) 4.0% Generation Customers Electricity sent out 44.9TWh 8.5% Reliability in Hong Kong (3) 0.97
Slide 7: Financial Performance & Outlook
Financial Performance & Outlook Commission of Laiwu III Wind Farm, Shandong, Mainland China, in September 2020 7
Slide 8: Financial Performance Highlights
Financial Performance Highlights Revenue EBITDAF (1) ACOI (1) HK$40,729 million HK$12,953 million HK$8,379 million 5.2% 1.6% 2.8% Operating Earnings (1) Total Earnings Capital Investment (2) HK$5,698 million HK$4,615 million HK$5,960 million 7.0% 23.2% 3.3% (1) EBITDAF, ACOI and Operating Earnings e
Slide 9: Hong Kong higher while Mainland China, Australia & one-offs lead earnings lower
Hong Kong higher while Mainland China, Australia & one-offs lead earnings lower HK$M 1H2021 1H2020 Change Operating Earnings Hong Kong electricity and related activities 4,019 3,853 4.3% Mainland China 962 1,253 23.2% Australia 837 1,194 29.9% India 111 108 2.8% Southeast Asia and Taiwan 152 183 16.
Slide 10: Hong Kong higher, thermal earnings lower in Mainland China and overseas
Hong Kong higher, thermal earnings lower in Mainland China and overseas HK$M 1H2021 1H2020 Hong Kong electricity and related activities 5,877 5,603 Higher earnings and progress on decarbonisation Mainland China 1,250 1,533 Steady operations but high coal prices compress margins Australia 996 1,284 D
Slide 11: Hong Kong: Higher earnings and progress on decarbonisation
Hong Kong: Higher earnings and progress on decarbonisation 8,000 256 10 5,877 5,603 8 4.7% 6,000 excl. FX ACOI (HK$m) 4,000 2,000 0 1H2020 FX Return on higher Others 1H2021 fixed assets Performance • ACOI: Up 4.7% reflecting increased investment in fixed assets • Capex: HK$4.8 bn: T&D HK$2.1 bn; Gen
Slide 12: Mainland China: Steady operations but high coal prices compress margins
Mainland China: Steady operations but high coal prices compress margins 2,000 115 37 1,533 1,500 (67) 24.2% 1,250 ACOI (352) (16) 522 excl. FX 1,000 (HK$m) Renewables 500 945 Nuclear Thermal 0 (121) Others (96) (500) 1H2020 FX Nuclear Renewables Thermal Others 1H2021 Performance • ACOI down 24.2%: H
Slide 13: Australia: Declining wholesale electricity prices drive earnings down
Australia: Declining wholesale electricity prices drive earnings down 2,500 649 2,000 218 Customer Enterprise 33.7% ACOI 1,500 1,284 295 excl. FX (867) (HK$m) 12 996 1,000 Energy (1,167) 1,568 500 0 1H2020 FX Customer Energy Enterprise 1H2021 Performance • ACOI: 33.7% down after FX as Energy segment
Slide 14: India: Major maintenance at Jhajjar more than offset higher renewables contribution
India: Major maintenance at Jhajjar more than offset higher renewables contribution 600 6 9 17 499 476 500 5.7% (55) excl. FX ACOI 400 (HK$m) 300 318 Renewables 200 Transmission 13 100 Thermal 145 0 1H2020 FX Renewables New Solar projects Thermal 1H2021 Performance • Wind: Higher wind generation & i
Slide 15: SEA & Taiwan: Ho-Ping earnings reduced on lower energy tariff
SEA & Taiwan: Ho-Ping earnings reduced on lower energy tariff 250 14 5 200 183 19.8% ACOI 14 158 excl. FX (HK$m) 150 (58) 100 127 Thermal Renewables 50 Others 39 0 (8) (50) 1H2020 FX Renewables Thermal Others 1H2021 Performance • Renewables: Stable earnings with steady solar resource • Thermal: Lowe
Slide 16: Sound Cash Flow Generation
Sound Cash Flow Generation HK$bn • Cash flow generation similar to 1H2020, Cash Inflows and Outflows 12.0 following the normal yearly profile 10.0 • Dividend paid at HK$4.6 bn Growth capex 9.0 0.5 • Total capital investment of HK$5.4 bn 6.4 SoC capex 6.0 4.9 • HK$4.9 bn SoC capex for network improve
Slide 17: Strong financial position
Strong financial position • Strong financial position Net Debt Credit Ratings • Healthy level of net debt and S&P Moody’s net debt/total capital ratio HK$47.9 billion CLP Holdings A Stable A2 Stable • Credit ratings reaffirmed in May and June A+ A1 Net Debt/Total Capital CLP Power HK Stable Stable •
Slide 18: Strategy
Strategy Corporate Video – A Clear Blue Sky: You and I. Together, we can Financial help Hong Kong towards its goal of carbon neutrality by 2050, Performance creating clearer bluer skies 18
Slide 19: Accelerating the decarbonisation journey in Hong Kong
Accelerating the decarbonisation journey in Hong Kong Simulated D2 Towards Carbon Neutral Simulated D1 by 2050 Solar Feed-in Tariff Construction of D1 & D2 CCGTs Offshore New Clean Energy Transmission System Wind Transmission Green Energy Green Zero-Carbon Hydrogen Imports Simulated photo Constructi
Slide 20: Leveraging Hong Kong capabilities and connecting with the Greater Bay Area
Leveraging Hong Kong capabilities and connecting with the Greater Bay Area District Cooling LNG Bunkering Potential Offshore Clean Energy in HK Wind Farm Transmission System Data Centres Low carbon Energy generation Infrastructure Investments & Energy as a Partnerships Service Smart energy technolog
Slide 21: Developing decarbonisation solutions for customers
Developing decarbonisation solutions for customers Decarbonise Energy Sources Electrification Improve Energy Offset Carbon Efficiency Emissions 21
Slide 22: Investing in the Energy Transition across our Operations
Investing in the Energy Transition across our Operations Mainland China India Mahidad wind farm, Gujarat, India Qian’an III (100MW) wind project with Sidhpur (252MW) wind project 5MW battery storage, Jilin, Mainland China in Gujarat, India Australia Australia Battery Storage at Ballarat, Tallawarra
Slide 23: Building the Utility of the Future
Building the Utility of the Future Customer Centricity Decarbonisation Digitalisation Workforce Transformation New Business Models 23
Slide 24: Questions and Answers
Questions and Answers Installation of solar panel system by CLPe Solutions at campus of Business FinancialTrends the English Schools Foundation (ESF), smart meter installation and the purchase of CLP Renewable Energy Certificates by and Outlook Performance Rosewood Hong Kong (clockwise from left) 24
Slide 25: Appendices
Appendices A new CLP E-Playground in Tai Po offers a new dimension in learning for young people curious about the electricity that powers their daily lives 25
Slide 26: CLP Group – Financial Highlights
CLP Group – Financial Highlights 1H2021 1H2020 Change Operating earnings (HK$M) 5,698 6,129 -7.0% Total earnings (HK$M) 4,615 6,010 -23.2% Operating earnings per share (HK$) 2.26 2.43 -7.0% Total earnings per share (HK$) 1.83 2.38 -23.2% Dividends per share (HK$) First interim dividend 0.63 0.63 - S
Slide 27: CLP Group – Operating Highlights
CLP Group – Operating Highlights 1H2021 1H2020 Change Safety (Total Recordable Injury Rate) (1) 0.20 0.25 (1) -0.05 Electricity sent out (TWh) (2) 44.9 41.4 +8.5% Generation and Storage Capacity (GW) (2) Total in Operation 24.2 23.5 +0.7 Non-Carbon Emitting (3) 6.0 6.0 - Committed / Under Constructi
Slide 28: Earnings for Hong Kong and Items affecting comparability
Earnings for Hong Kong and Items affecting comparability HK$M 1H2021 1H2020 Local electricity business 3,885 3,751 PSDC and Hong Kong Branch Line 134 102 Hong Kong electricity and related activities 4,019 3,853 HK$M 1H2021 1H2020 Australia – Litigation Settlement (777) - Australia – Provision for Mo
Slide 29: Reconciliation of Operating Earnings to ACOI
Reconciliation of Operating Earnings to ACOI Adjusted Current Operating Income or ACOI HK$M 1H2021 1H2020 Change • ACOI equals EBIT excluding items affecting comparability and fair value adjustments, and Operating Earnings includes the Group’s share in net earnings from joint 5,698 6,129 7.0% (Attri
Slide 30: CLP Group – Reconciliation of Operating Earnings and ACOI
CLP Group – Reconciliation of Operating Earnings and ACOI Hong Kong electricity Other earnings & HK$M Mainland China Australia India SEA & Taiwan Group total and related unallocated items 1H2021 Operating Earnings 3,905 1,096 837 111 152 (403) 5,698 (as per Segment Information in Annual Report) Real
Slide 31: CLP Group – Cash Flow and Financial Structure
CLP Group – Cash Flow and Financial Structure HK$M 1H2021 1H2020 Cash Flow Cash Flow • Higher free cash flow mainly reflected improved SoC inflows on higher sales EBITDAF 11,423 12,628 and favourable working capital movements offset by higher maintenance Less: Items affecting comparability 1,530 119
Slide 32: CLP Group – Dividend History
CLP Group – Dividend(1) History 3.5 CLP Dividend 1990 – 1H2021 CLP’s Dividend Policy aims to provide reliable and consistent ordinary dividend with steady growth 3.10 3.02 3.08 when supported by our earnings while ensuring that a solid financial position can be maintained 2.91 3.0 2.80 to fund our b
Slide 33: CLP Group – Financial Obligations at a Glance
CLP Group – Financial Obligations at a Glance HK$M 30 Jun 2021 31 Dec 2020 HONG KONG Total borrowings of CLPP, CAPCO & PSDC 45,860 43,449 Minus: Bank balances and liquid funds (4,633) (6,598) Net Debt – Hong Kong 41,227 36,851 OUTSIDE HONG KONG Total borrowings of India and Mainland China subsidiari
Slide 34: CLP Group – Credit Ratings
CLP Group – Credit Ratings CLP Holdings CLP Power CAPCO EnergyAustralia S&P Moody’s S&P Moody’s S&P Moody’s S&P Long-term Rating Foreign Currency A A2 A+ A1 AA- A1 BBB+ Outlook Stable Stable Stable Stable Stable Stable Stable Local Currency A A2 A+ A1 AA- A1 BBB+ Outlook Stable Stable Stable Stable
Slide 35: CLP Group – Highlights of Financing Activities
CLP Group – Highlights of Financing Activities For more information on CLP Climate Action Finance Framework CLP Holdings: Ample liquidity in the Group at 30 June 2021 • Undrawn facilities HK$29.3 billion, bank balances HK$8.6 billion. Scheme of Control – Climate Action Financing: Successful financin
Slide 36: CLP Group – Loan Balances by Type and Maturity
CLP Group – Loan Balances by Type and Maturity HK$M Loan Balance - Type HK$M Loan Balance – Maturity (1) Proportion of debt on fixed and 60,000 60,000 floating rate 2% 2% 50,000 22% 50,000 18% 24% 16% 40,000 11% 14% 40,000 23% 18% Jun 2021 30,000 30,000 37% 63% 36% 64% 69% 20,000 68% 20,000 Dec 2020
Slide 37: Hong Kong – Growing Business Scale
Hong Kong – Growing Business Scale Generation Transmission Distribution Retail 10,420 MW > 16,300 km of transmission and 236 primary and > 15,100 16,421 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.69 million customer accounts During 1H2021: • Local elect
Slide 38: Hong Kong – Electricity Sales and Capex
Hong Kong – Electricity Sales and Capex Electricity Sales Capital Expenditure (Accrual basis) GWh 1H2021 1H2020 Change HK$M 1H2021 1H2020 Change Residential 4,561 4,361 4.6% CLP Power Hong Kong 2,080 1,854 12.2% Commercial 6,383 6,195 3.0% CAPCO * 2,712 2,318 17.0% Infrastructure & Public Services 4
Slide 39: Hong Kong – Tariff, Reliability, Environmental and Carbon Intensity
Hong Kong – Tariff, Reliability, Environmental and Carbon Intensity HK$/kWh Low Tariff Unplanned customer High Reliability minutes lost per year 3.0 30 2.5 2.0 20 18 19 15 1.5 10 1.0 0.9 1.7 0.5 0 CLP Power Singapore London Sydney New York 0.0 (CBD) CLP Power Singapore London Sydney New York Remarks
Slide 40: Mainland China – Financials (HK$)
Mainland China – Financials (HK$) HK$M Operating/Total Earnings ACOI 1H2021 1H2020 1H2021 1H2020 Renewables 320 341 522 538 - Wind 231 217 322 298 - Hydro (18) 27 19 74 - Solar 107 97 181 166 Nuclear 869 804 945 870 - Daya Bay 425 469 447 494 - Yangjiang 444 335 498 376 Thermal (129) 196 (121) 211 -
Slide 41: Mainland China – Financials (Local Currency)
Mainland China – Financials (Local Currency) RMB’M Operating/Total Earnings ACOI 1H2021 1H2020 1H2021 1H2020 Renewables 267 311 435 490 - Wind 193 198 268 272 - Hydro (15) 25 16 67 - Solar 89 88 151 151 Nuclear 724 732 788 793 - Daya Bay 354 427 373 450 - Yangjiang 370 305 415 343 Thermal (107) 179
Slide 42: Mainland China – Performance and Capacity
Mainland China – Performance and Capacity Earnings and performance MW CLP capacity(1) in Mainland China • Higher earnings from Yangjiang were mainly due to higher 10,000 generation, while lower earnings from Daya Bay were mainly 8,000 due to planned refuelling outage in March and April 2021 • Lower
Slide 43: Mainland China – Market Sales in 1H2021
Mainland China – Market Sales in 1H2021 Province Projects with Market Sales (Equity MW) Guangxi FCG Thermal (1,806MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) JILIN Inner Mongolia Zhungeer Thermal (257MW) LIAONING GANSU INNER MONGOLIA Sichuan Jiangbian Hydro (330MW) HE
Slide 44: Australia – Financials
Australia – Financials HK$m Local Currency (A$m) 1H2021 1H2020 1H2021 1H2020 EBITDAF (before items affecting 2,127 2,267 363 444 comparability) Depreciation & Amortisation (1,131) (983) (189) (192) ACOI Customer (Retail) 295 (303) 49 (59) Energy (Wholesale) 1,568 2,338 270 458 Enterprise (Corporate)
Slide 45: Australia – Customer Operations
Australia – Customer Operations Customer Account Numbers 1H2021 1H2020 (2) (000s) Electricity Gas Total Electricity Gas Total Mass Market 1,583.0 843.9 2,426.9 1,599.2 842.8 2,442.0 Commercial & Industrial 7.7 0.2 7.9 9.7 0.3 9.9 Total Account Numbers 1,590.7 844.1 2,434.8 1,608.9 843.1 2,451.9 Weig
Slide 46: Australia – Customer Operations
Australia – Customer Operations 59% of bills issued in 1H2021 Supporting customers experiencing were E-bills hardship – • Compared with 1% in 1H2015 • 20.6k customers utilising EnergyAssist • Improving 6pts since 1H2020 programme 15 Ombudsman complaints/ 10k accounts 28.6pts improvement in • 76% red
Slide 47: Australia – Wholesale Market Conditions
Australia – Wholesale Market Conditions Year Ahead Swap Prices (1) • Contrasting wholesale prices in 1H2021 with low summer prices 120 resulting from cooler summer temperatures and increased 100 renewables, and high winter prices impacted by less coal generation due to outages across the National El
Slide 48: India – Financials
India – Financials HK$m Local Currency (Rs M) 1H2021 1H2020 1H2021 1H2020 Renewables 318 288 3,004 2,756 Thermal (Jhajjar) 193 258 1,823 2,468 Thermal (Paguthan & (48) (60) (453) (574) Corporate) Transmission 13 13 123 124 ACOI 476 499 4,497 4,774 Renewables 83 58 784 555 Thermal (Jhajjar) 42 65 397
Slide 49: India – Performance and Projects
India – Performance and Projects Performance and recent acquisition • As COVID-19 cases rose sharply in the second wave of the pandemic in India this year, CLP India strengthened its efforts to protect the health and safety of employees and maintain reliable operations in support of customers. Incre
Slide 50: Southeast Asia & Taiwan – Financials
Southeast Asia & Taiwan – Financials HK$ Local Currency 1H2021 1H2020 1H2021 1H2020 HK$M HK$M M M ACOI Thermal 127 172 NT$458 NT$665 Renewables 39 33 THB159 THB137 Operating expenditure (7) (9) - - Development expenditure (1) (13) - - Total 158 183 Operating earnings Thermal 127 172 NT$458 NT$665 Re
Slide 51: CLP Group – Generation and Storage Portfolio – 30 Jun 2021
CLP Group – Generation and Storage Portfolio(i) – 30 Jun 2021 19,867 Equity MW and 5,035MW Long Term Purchase (total 24,902MW) AUSTRALIA total 5,419MW* HONG KONG total 8,243MW* Operational Operational Yallourn 1,480 / 1,480 (c) Castle Peak A&B 4,108 / 4,108* (c) Mount Piper (ii) 1,430 / 1,430 (c) Bl
Slide 52: CLP Group – Renewable Generation Portfolio – 30 Jun 2021
CLP Group – Renewable Generation Portfolio – 30 Jun 2021 2,593 Equity MW and 825 MW Long Term Purchase (total 3,418MW) - 14% of CLP total generation portfolio MAINLAND CHINA 1,828 MW AUSTRALIA 854 MW* INDIA 705 MW Operational Operational Operational Wind 910 MW Wind 560 MW Wind 555 MW Hydro 489 MW S
Slide 53: CLP Group – Generation and Storage Capacity by Fuel Mix
CLP Group – Generation and Storage Capacity(1) by Fuel Mix 24,902 MW Attributable to CLP Group Total Operational Under construction Capacity by MW % MW % MW % Energy Type (a) + (b) (a) (b) Coal 12,027 48% 12,027 48% - - Gas 5,817 23% 5,217 21% 600 2% Nuclear 2,685 11% 2,685 11% - - Wind 2,125 9% 2,0
Slide 54: CLP Group – Energy Sent Out – 1H2021
CLP Group – Energy Sent Out – 1H2021 Energy Sent Out(1) TWh 25 CLP 2021 Interim Generation as Sent Out(1) 20 17.0 16.0 21% 24% 49% 52% 15 14.2 1H2021 13.3 2% 1% 2% 2% 9.4 10.2 5% 5% 1H2020 10 14% 20% 1H2020: 41.4 TWh 1H2021: 44.9 TWh 5 2.7 1.8 0.9 0.9 0 -5 1H2020 1H2021 1H2020 1H2021 1H2020 1H2021 1
Slide 55: Additional Resources
Additional Resources (1) To be published in August 2021 55