CLP Holdings Limited · HKEX:2
CLP — H1 2020 Earnings Presentation
54 slides from CLP's earnings presentation, Aug 3, 2020
Slide 1: CLP Holdings 2020 Interim Results Analyst Briefing
CLP Holdings 2020 Interim Results Analyst Briefing 3 August 2020
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 CLP donated 100,000 masks to underprivileged families through around 230 secondary schools as they prepared to resume class
Slide 5: Business performance broadly in line with last year
Business performance broadly in line with last year Focus on business resilience, caring for our people and supporting communities • High level of service and reliability while progressing infrastructure developments • Stable earnings from diversified portfolio • Lower demand and margins impacted by
Slide 6: Higher earnings on fair value recognition, dividend maintained
Higher earnings on fair value recognition, dividend maintained Operating Earnings Operating Earnings Per Share HK$6,129m +12% HK$2.43 +12% Second Interim Dividend First Interim Dividend HK$0.63 steady HK$0.63 steady Total Earnings Total Earnings Per Share HK$6,010m N/A HK$2.38 N/A 1H2019 included th
Slide 7: Operating performance
Operating performance Safety Reliability in Hong Kong (1) Average minutes lost pa (rolling 3 years) Total recordable injury rate Excluding Typhoon Mangkhut 1.26 -0.09 0.26 -0.08 Including Typhoon Mangkhut 10.03 -0.09 Customer Accounts Electricity Sales Hong Kong 2.650m +27k Hong Kong (local sales) 1
Slide 8: Group Financial Performance
Group Financial Performance Black Point Power Station, Hong Kong
Slide 9: Mitigated impact on earnings from COVID-19
Mitigated impact on earnings from COVID-19 HK$M 1H2020 1H2019 Change Revenue 38,701 43,838 12% Operating Earnings Hong Kong electricity and related activities 3,853 3,689 4% Local electricity business 3,751 3,587 PSDC and Hong Kong Branch Line 102 102 Outside Hong Kong 2,738 2,258 21% Mainland China
Slide 10: Reconciliation of Operating Earnings to ACOI
Reconciliation of Operating Earnings to ACOI Adjusted Current Operating Income or ACOI HK$M 1H2020 1H2019 Change • ACOI equals EBIT excluding items affecting comparability and fair value adjustments, and Operating Earnings 6,129 5,474 12% includes the Group’s share in net earnings from (Attributable
Slide 11: ACOI broadly in line with last year
ACOI broadly in line with last year HK$M 1H2020 1H2019 Hong Kong electricity and related activities 5,603 5,393 Dependable performance, on track to deliver ~50% gas-fired generation in 2020 Mainland China 1,533 1,481 Diversified portfolio delivers reliable earnings India 499 539 Reliable asset perfo
Slide 12: Performance by Business Units
Performance by Business Units Laiwu III Wind Farm, Shandong, Mainland China
Slide 13: Hong Kong: on track to deliver ~50% gas-fired generation in 2020
Dependable performance, on track to deliver ~50% gas-fired generation in 2020 HK$m 8,000 Hong Kong ACOI 210 5 5,603 Increase on 6,000 5,393 5,388 +4% like-for-like basis after adjusting for FX (5) 4,000 2,000 0 1H2019 FX Normalised Return on higher Others 1H2020 1H2019 fixed assets Operational Perfo
Slide 14: Mainland China: diversified portfolio delivers reliable earnings
Diversified portfolio delivers reliable earnings HK$m 2,000 Mainland China ACOI Increase on 1,600 28 86 1,533 +5% like-for-like 1,481 1,454 basis after (21) (14) 538 adjusting for FX 1,200 (27) 800 870 Renewables Nuclear 400 Thermal 211 Others 0 (86) 1H2019 FX Normalised Nuclear Renewables Thermal O
Slide 15: India: reliable asset performance, new transmission and solar assets
Reliable HK$m asset performance, contribution from new transmission and solar assets India ACOI 600 539 13 Decrease on 505 9 17 499 -1% like-for-like basis after 500 (34) (45) 288 adjusting for FX 400 300 200 13 Renewables Transmission 100 Thermal 198 0 1H2019 FX Normalised Renewables Thermal Transm
Slide 16: Southeast Asia and Taiwan: lower coal costs, higher Ho-Ping generation
Lower coal costs and higher generation at Ho-Ping HK$m Southeast Asia and Taiwan ACOI 250 76 200 183 +30% Increase on like-for-like 141 (29) 33 basis after 150 140 1 adjusting for FX 100 (5) Renewables 172 Thermal 50 Others 0 (22) (50) 1H2019 FX Normalised Renewables Thermal Opex & 1H2020 1H2019 Dev
Slide 17: Australia: earnings impacted by regulatory changes and margin pressures
Earnings impacted by regulatory changes and margin pressures HK$m 2,500 Australia ACOI Customer (303) 2,000 1,748 Enterprise -20% Decrease on 1,610 1,500 210 1,284 Energy (751) like-for-like basis after (138) 2,338 adjusting for FX 1,000 (5) (531) 500 -0 1H2019 FX Normalised Customer Energy Enterpri
Slide 18: Cash flow lower, modest increase in debt
Cash flow lower, modest increase in debt Cash Flow Capital Investments Dividends paid Cash from divestment HK$bn SoC Maintenance HK$b HK$bn Free Cash Flow Growth Others 10 10 10 Acquisitions 8 8 8 6.9 -9% 6.3 5.8 5.8 0.1 0.2 6 1.4 6 6 0.7 0.1 0.3 0.2 0.5 0.5 4 4 4 4.6 4.6 6.3 4.7 5.4 2 2 4.3 2 0 0 0
Slide 19: Business Trends and Outlook
Business Trends and Outlook EnergyAustralia’s new marketing campaign
Slide 20: Decarbonisation journey continues to progress
Decarbonisation journey continues to progress First new CCGT gas-fired unit at Black Point on-line, Offshore LNG terminal commenced construction second under development with EPC contract awarded Laiwu III (50MW) wind project in Installation of solar panels by Proposed pumped hydro site Shandong, Ma
Slide 21: Enhance customer experience and operational excellence through digitalisation
Enhance customer experience and operational excellence through digitalisation Launched revamped CLP mobile app/web with customer-centric features to enhance customer e-journey CLP e-Services available anytime and anywhere Installing smart meters progressively since late 2018 to provide customers wit
Slide 22: Focus • Delivery • Growth
Focus • Delivery • Growth Hong Kong Deliver clean energy infrastructure and enhance customer experience Mainland China Australia Explore Focus on opportunities in customer Greater Bay Area service, Climate Vision 2050 efficiency and Work towards our asset reliability decarbonisation goals Utility of
Slide 23: Questions and Answers
Questions and Answers CLP Laizhou II Wind Farm, Shandong, China Battery Storage Systems at Ballarat and Gannawarra, Victoria, Australia Tornado Solar Farm, Maharashtra, India (clockwise from top left)
Slide 24: Appendices
Appendices Installation of solar panels by CLPe Solutions at Hong Kong Air Cargo Terminal Limited
Slide 25: CLP Group – Financial Highlights – Additional Information
CLP Group – Financial Highlights – Additional Information Financial Information 1H2020 1H2019 Change Operating earnings (HK$M) 6,129 5,474 +12% Total earnings (HK$M) 6,010 (907) N/A Operating earnings per share (HK$) 2.43 2.17 +12% Total earnings per share (HK$) 2.38 (0.36) N/A Dividends per share (
Slide 26: CLP Group – Operating Highlights – Additional Information
CLP Group – Operating Highlights – Additional Information Operating Information 1H2020 1H2019 Change Safety (Total Recordable Injury Rate) 0.26 0.34 -0.08 Electricity sent out (TWh) (1) 41.4 42.1 -1.5% Generation Capacity (GW) (1) Total in Operation 23.5 23.2 +0.3 Non-Carbon Emitting (2) 6.0 5.7 +0.
Slide 27: Items affecting comparability
Items affecting comparability HK$M 1H2020 1H2019 Hong Kong Revaluation loss on investment property (119) - Australia Impairment on retail goodwill (1) - (6,381) Items affecting comparability (119) (6,381) Hong Kong Revaluation loss on investment property in 1H2020 • Relates to the retail portion of
Slide 28: CLP Group – Reconciliation of Operating Earnings and ACOI
CLP Group – Reconciliation of Operating Earnings and ACOI Hong Kong Other earnings & HK$M electricity and Mainland China India SEA & Taiwan Australia Group total unallocated items related 2020 Interim results Operating Earnings (as per Segment 3,639 1,355 108 183 1,194 (350) 6,129 Information in Ann
Slide 29: CLP Group – Cash Flow and Financial Structure
CLP Group – Cash Flow and Financial Structure HK$M 1H2020 1H2019 Cash Flow Cash Flow • Higher free cash flow mainly reflected favourable working capital EBITDAF 12,628 6,490 movements in Australia where lower deposits were required to Less: Items affecting comparability 119 6,381 meet derivative con
Slide 30: CLP Group – Dividend History
CLP Group – Dividend(1) History CLP’s Dividends Policy aims to provide reliable and consistent ordinary dividends with steady growth when supported by our earnings whilst ensuring that a solid financial position can be maintained to fund our business growth. In line with our established practice, ou
Slide 31: CLP Group – Financial Obligations at a Glance
CLP Group – Financial Obligations at a Glance 30 Jun 2020 31 Dec 2019 HONG KONG HK$M HK$M Total borrowings of CLPH, CLPP, CAPCO & PSDC 45,559 41,378 Minus: Bank balances and liquid funds (3,637) (4,747) Net Debt 41,922 36,631 OVERSEAS Total borrowings of EnergyAustralia, India and Mainland China sub
Slide 32: CLP Group – Credit Ratings
CLP Group – Credit Ratings CLP Holdings CLP Power CAPCO EnergyAustralia S&P Moody’s S&P Moody’s S&P Moody’s S&P Long term Rating Foreign Currency A A2 A+ A1 AA- A1 BBB+ Outlook Stable Stable Stable Stable Stable Stable Stable Local Currency A A2 A+ A1 AA- A1 BBB+ Outlook Stable Stable Stable Stable
Slide 33: CLP Group – Highlights of Financing Activities
CLP Group – Highlights of Financing Activities Pre-empt Financial Market Adversities • Quick actions to complete financings. Completed major financings for all CLP entities in Hong Kong early on, and achieved preferential terms for issuances of new bonds with different medium-to-long-term maturities
Slide 34: CLP Group – Loan Balances by Type and Maturity
CLP Group – Loan Balances by Type and Maturity Proportion of debt on fixed and floating rate 39% 46% Jun 2020 54% 61% Dec 2019 Floating rate (2) Fixed rate 1) The maturity of revolving loans is in accordance with the maturity dates of the respective facilities instead of the current loan drawdown te
Slide 35: Hong Kong – Growing Business Scale
Hong Kong – Growing Business Scale Generation Transmission Distribution Retail 9,220 MW > 16,100 km of transmission and 235 primary and > 14,900 15,729 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.65 million customer accounts During 1H2020: • Local electr
Slide 36: Hong Kong – Electricity Sales and Capex
Hong Kong – Electricity Sales and Capex Electricity Sales Capital Expenditure (Accrual basis) GWh 1H2020 1H2019 Change HK$M 1H2020 1H2019 Change Residential 4,361 3,977 CLP Power Hong Kong 1,854 1,982 (6.5%) 9.7% CAPCO 2,318* 1,903 21.8% Commercial 6,195 6,521 (5.0%) Infrastructure & Total Capex 4,1
Slide 37: Hong Kong – Tariff, Reliability & Environmental Improvement
Hong Kong – Tariff, Reliability & Environmental Improvement HK$/kWh Low Tariff Unplanned customer High Reliability 3.0 minutes lost per year 30 2.5 19 2.0 20 17 1.5 13 10.1 10 1.0 1.4 1.3(1) 0.5 0 Singapore CLP Power Sydney London New York 0.0 (CBD) CLP Power Singapore London Sydney New York Remarks
Slide 38: Mainland China – Financials (HK$)
Mainland China – Financials (HK$) HK$M Operating/Total Earnings ACOI 1H2020 1H2019 1H2020 1H2019 Renewables 341 316 538 537 - Wind 217 182 298 262 - Hydro 27 43 74 120 - Solar 97 91 166 155 Nuclear 804 845 870 916 - Daya Bay 469 446 494 469 - Yangjiang 335 399 376 447 Thermal 196 120 211 132 - Shand
Slide 39: Mainland China – Financials (Local Currency)
Mainland China – Financials (Local Currency) RMB’M Operating/Total Earnings ACOI 1H2020 1H2019 1H2020 1H2019 Renewables 311 273 490 464 - Wind 198 157 272 226 - Hydro 25 37 67 104 - Solar 88 79 151 134 Nuclear 732 730 793 792 - Daya Bay 427 385 450 406 - Yangjiang 305 345 343 386 Thermal 179 104 192
Slide 40: Mainland China – Renewables and Generation
Mainland China – Renewables and Generation HK$M 2,400 Operating Earnings ACOI MW CLP capacity(1) in Mainland China 2,000 10,000 1,481 1,533 1,600 1,253 8,000 1,174 537 538 1,200 341 316 6,000 800 845 804 916 870 4,000 400 0 120 196 132 211 2,000 (107) (88) (104) (86) -400 0 1H2019 1H2020 1H2019 1H20
Slide 41: Mainland China – Market sales in 1H2020
Mainland China – Market sales in 1H2020 Province Projects with Market Sales (Equity MW) Guangxi FCG thermal (1,806MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) JILIN Inner Zhungeer thermal (257MW) LIAONING GANSU Mongolia INNER MONGOLIA HEBEI TIANJIN Sichuan Jiangbian Hy
Slide 42: India – Financials
India – Financials HK$ Local Currency 1H2020 1H2019 1H2020 1H2019 HK$M HK$M Rs M Rs M Renewables 288 345 2,756 3,081 Thermal (Jhajjar) 258 283 2,468 2,528 Thermal (Paguthan) (60) (89) (574) (795) Transmission 13 - 124 - ACOI 499 539 4,774 4,814 Renewables 96 124 918 1,107 Thermal (Jhajjar) 109 94 1,
Slide 43: India – Broadening the portfolio
India – Broadening the portfolio Recent acquisitions of solar and power transmission assets HK$M 700 • CLP India increased the size of its solar energy portfolio by Operating Earnings ACOI more than 70% after it signed an agreement to acquire three 600 539 solar farms with a combined capacity of 122
Slide 44: Southeast Asia & Taiwan – Financials
Southeast Asia & Taiwan – Financials HK$ Local Currency 1H2020 1H2019 1H2020 1H2019 HK$M HK$M M M ACOI Thermal 172 94 NT$665 NT$371 Renewables 33 39 THB137 THB156 Operating expenditure (9) (9) - - Development expenditure (13) 16 - - Total 183 140 Operating earnings Thermal 172 94 NT$665 NT$371 Renew
Slide 45: Australia – Financials
Australia – Financials HK$ Local Currency 1H2020 1H2019 1H2020 1H2019 HK$M HK$M A$M A$M EBITDAF (before items affecting 2,267 2,655 444 478 comparability) Depreciation & Amortisation (983) (907) (192) (163) ACOI Customer (Retail) (1) (303) 248 (59) 45 Energy (Wholesale) (1) 2,338 2,311 458 416 Enter
Slide 46: Australia – Customer Operations
Australia – Customer Operations Customer Account Numbers 1H2020 1H2019 (000s) Electricity Gas Total Electricity Gas Total Mass Market 1,594.5 829.7 2,424.2 1,639.6 847.7 2,487.3 Commercial & Industrial 9.7 0.3 9.9 12.7 0.3 13.0 Total Account Numbers 1,604.2 830.0 2,434.1 1,652.3 848.1 2,500.3 Weight
Slide 47: Australia – Customer Operations
Australia – Customer Operations Supporting customers experiencing hardship - 53% of bills issued in 1H2020 Vulnerability calls have increased 65% were E-bills due to COVID-191 - Compared with 1% in 1H2015 - Improving 7pts since 1H2019 20 Ombudsman 25.6pts improvement in complaints/10k accounts custo
Slide 48: Australia – Wholesale Market Conditions
Australia – Wholesale Market Conditions • Wholesale prices have fallen sharply in 2020 driven by higher Year Ahead SWAP Prices (1) 120 generation availability, increasing renewables and the impact of COVID-19 on demand and outage timing 100 • Despite an overall declining trend in wholesale prices, p
Slide 49: CLP Group – Generation Portfolio – 30 Jun 2020
CLP Group – Generation Portfolio – 30 Jun 2020 19,304 Equity MW and 4,785MW Long Term Purchase (total 24,089MW) HONG KONG total 7,593MW* AUSTRALIA total 5,332MW* Operational Operational Castle Peak 4,108 / 4,108* (c) Yallourn 1,480 / 1,480 (c) Black Point (c) 2,625 / 2,625* (g) Mount Piper 1,400 / 1
Slide 50: CLP Group – Renewable Generation Portfolio – 30 Jun 2020
CLP Group – Renewable Generation Portfolio – 30 Jun 2020 2,517 Equity MW and 825 MW Long Term Purchase (total 3,342MW) HONG KONG total 10 MW - 14% of CLP total generation portfolio Operational AUSTRALIA total 854 MW* West New Territories Landfill 10/10 Operational Wind 560 MW MAINLAND CHINA total 1,
Slide 51: CLP Group – Generation Capacity by Fuel Mix – 30 Jun 2020
CLP Group – Generation Capacity(1) by Fuel Mix – 30 Jun 2020 24,089 MW Attributable to CLP Group Total Operational Under construction Capacity by MW % MW % MW % Energy Type (a) + (b) (a) (b) Coal 11,997 50% 11,997 50% - - Gas 5,165 21% 4,615 19% 550 2% Nuclear 2,685 11% 2,685 11% - - Wind 2,049 9% 1
Slide 52: CLP Group – Energy Sent Out – 1H2020
CLP Group – Energy Sent Out – 1H2020 Energy Sent Out(1) TWh 25 CLP 2020 Interim Generation as Sent Out(1) 20 1H2020 16.5 16.0 24% 21% 1H2019 49% 15 13.3 57% 13.0 1% 2% 1% 5% 2% 9.3 10 5% 14% 9.3 1H2019: 42.1 TWh 19% 1H2020: 41.4 TWh 5 2.5 1.8 0.8 0.9 0 -5 1H2019 1H2020 1H2019 1H2020 1H2019 1H2020 1H
Slide 53: Additional Resources
Additional Resources (1) To be published in August 2020 53
Slide 54: Thank you
CLP Holdings Thank you Energy for Brighter Tomorrows