CLP Holdings Limited · HKEX:2
CLP — H1 2019 Earnings Presentation
56 slides from CLP's earnings presentation, Aug 6, 2019
Slide 1: CLP Holdings 2019 Interim Results Analyst Briefing
CLP Holdings 2019 Interim Results Analyst Briefing 6 August 2019
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 Performance Overview Group Financial Performance Performance by Business Units Business Trends and Outlook Questions and Answers Appendices 3
Slide 4: Performance Overview
Performance Overview Shareholders’ Visit Programme, Hong Kong
Slide 5: First half transitions underpinned by strong fundamentals
First half transitions underpinned by strong fundamentals First half earnings impact Long-term outlook • SoC rate of return reset Development plan ensures growth Simple competitive tariffs • Lower generator availability Invest in fast-response generation • Partnership dilutes CLP interest New pr
Slide 6: Balance sheet strength supports ongoing growth in dividend
Balance sheet strength supports ongoing growth in dividend Operating Earnings Operating Earnings Per Share HK$5,474m -31% HK$2.17 -31% Second Interim Dividend First Interim Dividend HK$0.63 +3% HK$0.63 +3% Total Earnings Total Earnings Per Share HK$(907m) HK$(0.36) Including impairment of goodwill f
Slide 7: Resilient performance under challenging conditions
Resilient performance under challenging conditions Safety Reliability in Hong Kong (2) Average minutes lost pa (rolling 3 years) Total recordable injury rate Excluding Typhoon Mangkhut 1.35 -0.14 0.34 +0.13(1) Including Typhoon Mangkhut 10.12 +8.63 Customer Accounts Electricity Sales Hong Kong 2.623
Slide 8: Group Financial Performance
Group Financial Performance CLP Laizhou II Wind Farm, Shandong, Mainland China
Slide 9: Lower operating earnings mainly from Hong Kong and Australia
Lower operating earnings mainly from Hong Kong and Australia HK$M 1H2019 1H2018 Change Revenue 43,838 46,464 6% Operating Earnings Hong Kong electricity and related activities 3,689 4,628 20% Local electricity business 3,587 4,497 Sales to Guangdong - 28 PSDC and Hong Kong Branch Line 102 103 Outsid
Slide 10: Reconciliation of Operating Earnings to ACOI
Reconciliation of Operating Earnings to ACOI HK$M 1H2019 1H2018 Change Adjusted Current Operating Income or ACOI ACOI equals EBIT excluding items affecting Operating Earnings comparability and fair value adjustments, and 5,474 7,886 31% (Attributable to CLP) includes the Group’s share in net earni
Slide 11: Lower ACOI mainly from Hong Kong and Australia
Lower ACOI mainly from Hong Kong and Australia HK$M 1H2019 1H2018 Hong Kong electricity and related activities 5,393 6,604 Full six months impact of the lower permitted rate of return Mainland China 1,481 1,359 Earnings growth across portfolio supported by nuclear contribution India 539 661 Higher e
Slide 12: Performance by Business Units
Performance by Business Units Meizhou Solar Farm, Guangdong, Mainland China
Slide 13: Full six months impact of the lower permitted rate of return
Full six months impact of the lower permitted rate of return HK$m Hong Kong ACOI 8,000 6,604 8 6,612 -18% Decrease on 6,000 138 5,393 like-for-like basis after adjusting for FX (1,329) (28) 4,000 2,000 0 1H2018 FX Normalised Change in Return on Others 1H2019 1H2018 permitted higher fixed return asse
Slide 14: Earnings growth across portfolio supported by nuclear contribution
Earnings growth across portfolio supported by nuclear contribution HK$m Mainland China ACOI 1,600 55 9 +20% 51 1,481 1,400 1,359 128 Increase on like-for-like 1,238 537 basis after adjusting for FX 1,200 (121) 1,000 800 916 Renewables 600 Nuclear Thermal 400 Others 200 132 0 (104) 1H2018 FX Normalis
Slide 15: Higher earnings from renewables & Jhajjar offset by end of Paguthan PPA
Higher earnings from renewables & Jhajjar offset by end of Paguthan PPA HK$m India ACOI 800 661 51 624 22 -14% 600 (37) 45 539 Decrease on like-for-like basis after (203) 345 adjusting for FX 400 Renewables 200 194 Thermal 0 1H2018 FX Normalised Renewables Thermal - Thermal - Others 1H2019 1H2018 Jh
Slide 16: Higher earnings driven by higher energy tariff at Ho-Ping
Higher earnings driven by higher energy tariff at Ho-Ping HK$m Southeast Asia and Taiwan ACOI 160 23 140 +130% 140 7 Increase on 53 like-for-like 120 39 basis after adjusting for FX 100 80 62 3 94 61 Others 60 Renewables (1) Thermal 40 20 0 (20) 1H2018 FX Normalised Renewables Thermal Opex & Devex 1
Slide 17: Earnings impacted by generation challenges and regulatory changes
Earnings impacted by generation challenges and regulatory changes HK$m Australia ACOI 4,000 3,095 2,854 -39% 3,000 Decrease on (241) Enterprise like-for-like 2,000 (453) 1,748 Energy (895) basis after adjusting for FX (629) (24) 2,173 1,000 Customer 470 -0 1H2018 FX Normalised Customer Energy Enterp
Slide 18: Strong financial position supports dividends
Strong financial position supports dividends Cash Flow Capital Investments Dividends paid HK$bn Cash from divestment HK$bn SoC Maintenance HK$bn Free Cash Flow Growth Others 10 9.6 10 10 Acquisitions 1.0 (28%) 8 8 8 6.9 (8%) 1.2 6.3 5.8 6 1.4 6 6 0.2 0.7 +4% 8.7 0.2 0.3 4 4 0.4 0.5 4 4.6 4.4 5.4 4.3
Slide 19: Business Trends and Outlook
Business Trends and Outlook CLP Power Learning Institute, Hong Kong
Slide 20: In Hong Kong, our energy transition and decarbonisation journey continues
In Hong Kong, our energy transition and decarbonisation journey continues… New combined cycle gas-fired generation • D1 – Begin commercial operation by early 2020 • D2 – Commenced development, target to complete construction in 2023 Offshore LNG terminal: Site investigation and front-end engineering
Slide 21: Building on significant achievements over the last 3 decades
…building on significant achievements over the last 3 decades Sales • The current Development Plan Customers almost doubled will further reduce our carbon almost 4.0 CO2e 40 footprint, building on our doubled 34.2 emissions 3.5 35 strong record in Hong Kong flat 3.0 Emissions 30 2.6 • In June Hong K
Slide 22: Lowering our carbon emission intensity outside Hong Kong
We are also lowering our carbon emission intensity outside Hong Kong Portfolio underpinned by reliable nuclear capacity Continue investments in renewable energy Pursue opportunities in the Greater Bay Area New partnership positioned for future growth Acquired full ownership of Gale and Veltoor solar
Slide 23: Continuing our journey to be a Utility of the Future
We are also continuing our journey to be a Utility of the Future Utility of the Future 22 23
Slide 24: Focus • Delivery • Growth
Focus • Delivery • Growth Hong Kong Progress on Development Plan & SoC initiatives Australia Mainland China Focus on opportunities Pursue opportunities to bring reliable and with a focus in the affordable energy to Greater Bay Area customers Climate Vision 2050 Launch plans to meet renewed Climate V
Slide 25: Questions and Answers
Questions and Answers 2019 Annual General Meeting, Hong Kong
Slide 26: Appendices
Appendices Xundian Wind Farm, Yunnan, China Battery Storage Systems at Ballarat and Gannawarra, Australia Veltoor Solar Farm, Telangana, India (clockwise from top left)
Slide 27: CLP Group – Financial Highlights – Additional Information
CLP Group – Financial Highlights – Additional Information Financial Information 1H2019 1H2018 Change Operating earnings (HK$M) 5,474 7,886 -31% Total earnings (HK$M) (907) 7,436 N/A Operating earnings per share (HK$) 2.17 3.12 -31% Total earnings per share (HK$) (0.36) 2.94 N/A Dividends per share (
Slide 28: CLP Group – Operating Highlights – Additional Information
CLP Group – Operating Highlights – Additional Information Operating Information 1H2019 1H2018 Change Safety (Total Recordable Injury Rate) (1) 0.34 0.21 +0.13 Electricity sent out (TWh) (2) 42.1 44.7 -5.9% Generation Capacity (GW) (2) Total in Operation 23.2 23.5 -0.3 Non-Carbon Emitting (3) 5.7 5.3
Slide 29: Items affecting comparability
Items affecting comparability HK$M 1H2019 1H2018 Australia Impairment on retail goodwill (6,381) - India Provision for deemed generation receivables - (450) Items affecting comparability (6,381) (450) 1H2019 Impairment of retail goodwill in Australia • Goodwill in the Australian Retail business init
Slide 30: CLP Group – Reconciliation of Operating Earnings and ACOI
CLP Group – Reconciliation of Operating Earnings and ACOI Hong Kong Other earnings & HK$M electricity and Mainland China India SEA & Taiwan Australia Group total unallocated items related 2019 Interim results Operating Earnings (as per Segment 3,505 1,276 120 140 824 (391) 5,474 Information in Inter
Slide 31: CLP Group – Cash Flow and Financial Structure
CLP Group – Cash Flow and Financial Structure HK$M 1H2019 1H2018 Cash Flow Cash Flow Lower free cash flow mainly reflected lower EBITDAF and unfavorable EBITDAF 6,490 14,936 working capital movements in Australia Less: Items affecting comparability 6,381 450 Cash from divestment represents remai
Slide 32: CLP Group – Dividend History
CLP Group – Dividend(1) History CLP’s Dividends Policy aims to provide reliable and consistent ordinary dividends with steady growth when supported by our earnings whilst ensuring that a solid financial position can be maintained to fund our business growth. In line with our established practice, ou
Slide 33: CLP Group – Financial Obligations at a Glance
CLP Group – Financial Obligations at a Glance 30 Jun 2019 31 Dec 2018 HONG KONG HK$M HK$M Total borrowings of CLPH, CLPP, CAPCO & PSDC 42,168 43,247 Minus: Bank balances and liquid funds (1,855) (4,437) Net Debt 40,313 38,810 OVERSEAS Total borrowings of EnergyAustralia, India and Mainland China sub
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 with undrawn facilities of HK$19.9 billion and HK$6.6 billion bank balances as at 30 June 2019. Scheme of Control • New financing obtained at extrem
Slide 36: CLP Group – Loan Balances by Type and Maturity
CLP Group – Loan Balances by Type and Maturity (1) Proportion of debt on fixed and floating rate 47% 47% 53% 53% Jun 2019 Dec 2018 Floating rate (2) Fixed rate 1) The maturity of revolving loans is in accordance with the maturity dates of the respective facilities instead of the current loan drawdow
Slide 37: Hong Kong – Growing Business Scale
Hong Kong – Growing Business Scale Generation Transmission Distribution Retail 9,185 MW of > 15,900 km of transmission and 232 primary and > 14,700 15,916 GWh sold and installed capacity high voltage distribution lines secondary substations 2.62 million customer accounts During 1H2019: Local elect
Slide 38: Hong Kong – Electricity Sales and Capex
Hong Kong – Electricity Sales and Capex Electricity Sales Capital Expenditure (Accrual basis) GWh 1H2019 1H2018 Change HK$M 1H2019 1H2018 Change Residential 3,977 4,077 (2.5%) CLP Power Hong Kong 1,982 1,930 2.7% Commercial 6,521 6,458 1.0% CAPCO 1,903 1,957 (2.8%) Infrastructure & Public Services 4
Slide 39: Hong Kong – Tariff, Reliability & Environmental Improvement
Hong Kong – Tariff, Reliability & Environmental Improvement HK$/kWh Low Tariff Unplanned customer High Reliability 3.0 minutes lost per year 30 2.5 18 19 2.0 20 1.5 10.3 11 10 1.0 0.4 1.4(1) 0.5 0 Singapore CLP Power Sydney London New York 0.0 (CBD) Remarks: More Reliable Less Reliable CLP Power Sin
Slide 40: Mainland China – Financials (HK$)
Mainland China – Financials (HK$) HK$M Operating/Total Earnings ACOI 1H2019 1H2018 1H2019 1H2018 Renewables 316 335 537 517 - Wind 182 249 262 332 - Hydro 43 16 120 70 - Solar 91 70 155 115 Nuclear 845 740 916 797 - Daya Bay 446 409 469 430 - Yangjiang 399 331 447 367 Thermal 120 80 132 82 - Shandon
Slide 41: Mainland China – Financials (Local Currency)
Mainland China – Financials (Local Currency) RMB’M Operating/Total Earnings ACOI 1H2019 1H2018 1H2019 1H2018 Renewables 273 273 464 421 - Wind 157 203 226 270 - Hydro 37 13 104 57 - Solar 79 57 134 94 Nuclear 730 602 792 649 - Daya Bay 385 333 406 350 - Yangjiang 345 269 386 299 Thermal 104 65 114 6
Slide 42: Mainland China – Renewables and Generation
Mainland China – Renewables and Generation MW HK$M 10,000 1,800 Operating Earnings ACOI CLP capacity(1) in Mainland China 1,481 1,359 8,000 1,400 1,174 1,116 537 316 517 6,000 1,000 335 600 916 4,000 845 797 740 200 2,000 80 120 82 132 (39) (107) (37) (104) -200 0 1H2018 1H2019 1H2018 1H2019 Renewab
Slide 43: Mainland China – Market sales in 1H2019
Mainland China – Market sales in 1H2019 Province Projects (Equity MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) Guangxi FCG thermal (1,806MW) JILIN Sichuan Jiangbian Hydro (330MW) LIAONING GANSU INNER MONGOLIA Gansu Jinchang Solar (85MW) HEBEI TIANJIN Inner Zhungeer the
Slide 44: India – Financials
India – Financials HK$ Local Currency 1H2019 1H2018 1H2019 1H2018 HK$M HK$M Rs M Rs M Thermal (Jhajjar) 283 246 2,528 2,073 Thermal (Paguthan) (89) 121 (795) 1,020 Renewables 345 294 3,081 2,477 ACOI 539 661 4,814 5,570 Thermal (Jhajjar) 94 50 840 421 Thermal (Paguthan) (38) 115 (339) 969 Renewables
Slide 45: India – Broadening the portfolio
India – Broadening the portfolio HK$M Acquisition of power transmission assets 800 CLP India has entered into a binding agreement to purchase Operating Earnings ACOI 700 661 three power transmission assets from Kalpataru Power Renewables 600 539 Transmission Limited (KPTL) and Techno Electric & En
Slide 46: Southeast Asia & Taiwan – Financials
Southeast Asia & Taiwan – Financials HK$ Local Currency 1H2019 1H2018 1H2019 1H2018 HK$M HK$M M M ACOI Thermal 94 42 NT$371 NT$161 Renewables 39 36 THB156 THB144 Operating expenditure (9) (5) - - Development expenditure 16 (11) - - Total 140 62 Operating earnings Thermal 94 42 NT$371 NT$161 Renewabl
Slide 47: Australia – Financials
Australia – Financials HK$ Local Currency 1H2019 1H2018 1H2019 1H2018 HK$M HK$M A$M A$M EBITDAF (before items affecting 2,655 3,913 478 650 comparability) Depreciation & Amortisation (907) (818) (163) (136) ACOI Customer (Retail) 470 1,001 85 166 Energy (Wholesale) 2,173 3,039 391 505 Enterprise (Co
Slide 48: Australia – Customer Operations
Australia – Customer Operations Customer Account Numbers 1H2019 1H2018 (000s) Electricity Gas Total Electricity Gas Total Mass Market 1,639.6 847.7 2,487.3 1,689.1 861.8 2,550.9 Commercial & Industrial 12.7 0.3 13.0 12.1 0.3 12.4 Total Account Numbers 1,652.3 848.1 2,500.3 1,701.2 862.1 2,563.3 Weig
Slide 49: Australia – Customer Operations
Australia – Customer Operations Customer Focussed; Leadership in an Industry with Low Trust Improving Efficiency Paper Bill E-Bill 100% EnergyAustralia has supported our customers 80% through: 60% Holding electricity prices flat and absorbing 40% additional supply-chain and other costs 20% Com
Slide 50: Australia – Wholesale Market Conditions
Australia – Wholesale Market Conditions Year Ahead SWAP Prices (1) 120 Wholesale electricity prices impacted by tight supply/demand balance, from reduced coal 100 generation, drought limiting hydro generation, and delays in new renewable build SWAP Price A$/MWh 80 Forward curve falls as new rene
Slide 51: CLP Group – Generation Portfolio – 30 Jun 2019
CLP Group – Generation Portfolio – 30 Jun 2019 19,208 Equity MW and 4,777MW Long Term Purchase (total 23,985MW) AUSTRALIA total 5,300MW* HONG KONG total 7,568MW* Operational Operational Yallourn 1,480 / 1,480 (c) Castle Peak 4,108 / 4,108* (c) Mount Piper 1,400 / 1,400 (c) Black Point (a) 2,600 / 2,
Slide 52: CLP Group – Renewable Generation Portfolio – 30 Jun 2019
CLP Group – Renewable Generation Portfolio – 30 Jun 2019 2,469 Equity MW and 825 MW Long Term Purchase (total 3,294MW) HONG KONG total 10 MW Under Construction - 14% of CLP total generation portfolio West New Territories Landfill 10/10 AUSTRALIA total 854 MW* Operational MAINLAND CHINA total 1,752 M
Slide 53: CLP Group – Generation Capacity by Fuel Mix – 30 Jun 2019
CLP Group – Generation Capacity(1) by Fuel Mix – 30 Jun 2019 23,985 MW Attributable to CLP Group Under construction / Total Operational Capacity by Committed MW % MW % % Energy Type MW (a) + (b) (a) (b) Coal 11,997 50% 11,997 50% - - Gas 5,109 21% 4,559 19% 550 2% Nuclear 2,685 11% 2,500 10% 185 1%
Slide 54: CLP Group – Energy Sent Out – 1H2019
CLP Group – Energy Sent Out – 1H2019 Energy Sent Out(1) TWh 30 CLP 2019 Interim Generation as Sent Out(1) 25 1H2019 21% 18% 1H2018 20 17.0 16.5 57% 1% 63% 1% 1% 5% 15 2% 13.0 11.9 5% 12% 10.5 9.3 10 14% 1H2018: 44.7 TWh 1H2019: 42.1 TWh 4.6 5 2.5 0.8 0.8 0 -5 1H2018 1H2019 1H2018 1H2019 1H2018 1H201
Slide 55: Additional Resources
Additional Resources (1) To be published in August 2019 55
Slide 56: Thank you
CLP@ +z CLP Holdings Thank you Energy for Brighter Tomorrows