Clp Holdings Limited · HKEX:2
Clp — FY2022 Earnings Presentation
61 slides from Clp's earnings presentation, Feb 27, 2023
Slide 1: 2022 Annual Results Presentation
CLP Holdings 2022 Annual Results Presentation 27 February 2023
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 Richard Lancaster, Chief Executive Officer Financial Performance and Outlook Nicolas Tissot, Chief Financial Officer Strategy and Roadmap Richard Lancaster, Chief Executive Officer Installation of solar panel at the Hong Kong International Airport Questions and answers 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: Reconciliation of Operating Earnings to ACOI
Reconciliation of Operating Earnings to ACOI Adjusted Current Operating Income or ACOI HK$m 2022 2021 Change • ACOI equals EBIT excluding items affecting comparability and fair value adjustments, and includes the Group’s share in Operating Earnings earnings from joint ventures and associates 4,623 9
Slide 11: Adjusted Current Operating Income (ACOI) by business unit
Adjusted Current Operating Income (ACOI) by business unit Solid performances in core markets offset by EnergyAustralia losses HK$m 20,000 183 763 13 902 15,191 151 864 15,000 465 2,200 (291) 2,789 12 11,862 20% (3,495) (157) (312) excl. FX 10,000 SEA & Taiwan * Apraava Energy 12,324 12,454 EnergyAus
Slide 12: Hong Kong ACOI
Hong Kong Higher earnings reflect progress of major projects 16,000 491 12,324* 12,454 12,000 1.2% ACOI (HK$m) (21) (340) excl. FX 8,000 4,000 - 2021 FX Return on higher fixed Lower SoC 2022 assets allowable costs Performance Outlook • ACOI up 1.2%: Return on higher fixed assets reflecting progress
Slide 13: Mainland China ACOI
Mainland China Strong financial and strategic achievements and less exposure to coal 3,000 595 2,789 2,500 95 113 2,200 (40) 999 38% 2,000 excl. FX (174) 1,500 ACOI (HK$m) Renewables 1,000 2,135 Nuclear 500 Thermal 42 Others - (387) (500) 2021 FX Nuclear Renewables Thermal Others 2022 Performance Ou
Slide 14: EnergyAustralia ACOI
EnergyAustralia Earnings impact due to tight market supply and operational challenges at thermal plants 2,000 Gross Margin Opex and D&A 1,000 465 ACOI (HK$m) - (33) 809% (1,000) excl. FX (2,000) (1,977) 402 44 (3,000) (1,703) (261) (3,063) (4,000) 2021 FX Mt Piper Yallourn Other Energy Customer Opex
Slide 15: EnergyAustralia wholesale electricity prices
EnergyAustralia CLP@ re s/nawh 00 200 100 Historical (spot) vs future (forward) wholesale NEM electricity prices 120 0220 @320 @i20 Giz q71 371 tz Giz p22 BN GAZ G12 OPI G32 NZS aq GIA GHZ GIZA A175 PIS GBI aA25 Historical Wem Weighted Average Spot Price = == Weighted ouarterty Forward Price as at 2
Slide 16: Apraava Energy ACOI
Apraava Energy Earnings from KMTL transmission off the back of strengthening of CDPQ partnership 1,000 902 168 864 1.4% ACOI (HK$m) 800 (50) 179 (96) excl. FX 600 (60) 208 Thermal 400 477 Transmission 200 Renewables - 2021 FX Renewables Thermal Transmission 2022 Performance Outlook • ACOI up 1.4%: S
Slide 17: 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 18: 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 19: Strategy and Roadmap
| | Strategy and Roadmap CLP@) +e
Slide 20: 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 19
Slide 21: 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 22: 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 23: 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 24: 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 25: 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 26: Questions and Answers
Questions and Ω The distributed solar project at the headquarters of the MTR Corporation (Shenzhen) Limited is the first one-stop energy project CLPe has launched in Longhua District, Answers Shenzhen, Mainland China 25
Slide 27: Appendices
Appendices With the help of an EnergyAustralia installed microgrid, a Melbourne residential community will see lower energy bills 26
Slide 28: 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 29: Items affecting comparability
Items affecting comparability Hong Kong Profit from sale of properties HK$M 2022 2021 Sale of properties relating to Argyle Street redevelopment Hong Kong Revaluation loss on investment property Hong Kong – Profit from sale of properties 80 - Retail portion of the Laguna Mall in Hong Kong Mainland C
Slide 30: CLP Group – Operating highlights
CLP Group – Operating highlights 2022 2021 Change Safety (Total recordable injury rate) (1) 0.25 0.23 +0.02 Reliability in Hong Kong (minutes lost pa) (2) 5.69 0.99 +4.70 Customer accounts (Thousand) Hong Kong 2,752 2,711 +41 Australia 2,462 2,443 +19 Electricity sent out (TWh) (3) 87.4 91.2 -4.2% G
Slide 31: CLP Group – Reconciliation of Operating Earnings and ACOI
CLP Group – Reconciliation of Operating Earnings and ACOI Hong Kong energy and Other earnings & HK$M Mainland China EnergyAustralia Apraava Energy SEA & Taiwan Group total related activities unallocated items 2022 Annual Operating Earnings 8,338 2,492 (5,267) 193 11 (1,144) 4,623 (as per Segment Inf
Slide 32: CLP Group – Cash flow and financial structure
CLP Group – Cash flow and financial structure (1) HK$M 2022 2021 (restated) Cash Flow Cash Flow • Lower free cash flow mainly reflected lower earnings from EnergyAustralia, Consolidated EBITDAF 16,586 22,880 unfavourable working capital movements and lower inflows from SoC operations in Less: Items
Slide 33: Dividends
Dividends A history of returning cash to shareholders CLP Ordinary Dividend 1990 – 2022 and Shareholding by Category HK$ 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 34: 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 35: 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 36: 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$4.3 billion • A
Slide 37: CLP Group – Loan balances by type and maturity
CLP Group – Loan balances by type and maturity Loan Balance - Type Loan Balance – Maturity (1) Proportion of Debt on Fixed HK$M HK$M and Floating Rate 60,000 60,000 2% 5% 18% 19% 50,000 25% 50,000 30% 11% 11% 40,000 40,000 17% 30% 39% 30,000 30,000 48% 52% Dec 2022 66% 61% 20,000 60% 20,000 54% Dec
Slide 38: Hong Kong – Growing business scale
Hong Kong – Growing business scale Generation Transmission Distribution Retail 10,445 MW > 16,600 km of transmission and 240 primary and > 15,400 34,824 GWh sold and generation portfolio high voltage distribution lines secondary substations 2.752 million customer accounts During 2022: • Local electr
Slide 39: Hong Kong – Electricity sales, earnings and capex
Hong Kong – Electricity sales, earnings and capex Electricity sales Capital expenditure (Accrual basis) GWh 2022 2021 Change Proportion HK$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 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 2023 High reliability HK$/kWh Unplanned customer minutes lost per year 4.0 London +103% 40 31 3.0 30 Tokyo +76% 20 16 2.0 13 Singapore +41% 10 5.7 * 1.0 0.5 0 1.0
Slide 41: Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume
Hong Kong – Tariff, Energy Cost, Fuel Mix and Gas Volume Tariffs Energy Cost HK¢/kWh 160 154.4 Average Net Tariff HK$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 42: Mainland China – Financials (HK$)
Mainland China – Financials (HK$) HK$m Operating/Total Earnings ACOI 2022 2021 2022 2021 Renewables 610 545 999 920 - Wind 313 305 475 457 - Hydro 112 45 210 129 - Solar 185 195 314 334 Nuclear 1,965 1,908 2,135 2,073 - Daya Bay 970 963 1,021 1,014 - Yangjiang 995 945 1,114 1,059 Thermal 45 (572) 42
Slide 43: Mainland China – Financials (RMB)
Mainland China – Financials (RMB) RMB’m Operating/Total Earnings ACOI 2022 2021 2022 2021 Renewables 526 452 862 763 - Wind 270 253 410 379 - Hydro 97 37 181 107 - Solar 159 162 271 277 Nuclear 1,695 1,583 1,842 1,719 - Daya Bay 837 799 881 841 - Yangjiang 858 784 961 878 Thermal 39 (475) 36 (477) -
Slide 44: Mainland China – Earnings, performance and opportunities
Mainland China – Earnings, performance and opportunities Earnings and performance Business development opportunities • Higher earnings from Nuclear was mainly due to higher • There are two grid-parity wind projects: the 50MW generation and higher market-based tariff of Yangjiang. Xundian II project
Slide 45: Mainland China – Market sales in 2022
Mainland China – Market sales in 2022 Province Projects with Market Sales (Equity MW) Guangxi FCG Thermal (1,806MW) Yunnan Xundian Wind (50MW) Xicun Solar (84MW) Dali Yang_er Hydro (50MW) Inner Mongolia Zhungeer Thermal (257MW) JILIN Hebei Sanhe Thermal (220MW) LIAONING Tianjin Panshan Thermal (207M
Slide 46: EnergyAustralia – Financials
EnergyAustralia – Financials HK$m Local Currency 2022 2021 2022 2021 HK$M HK$M A$M A$M EBITDAF (before items affecting (695) 2,792 (128) 486 comparability) Depreciation & Amortisation (2,368) (2,327) (437) (399) ACOI Customer (Retail) (1) 1,131 910 208 156 Energy (Wholesale) (1) (2,879) 1,481 (531)
Slide 47: 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$/MWh) 1000 Av market 2021 2022 Shortfall of generation volume 400 contract price Difference between 2022 monthly Gener
Slide 48: EnergyAustralia – fair value movements
EnergyAustralia – fair value movements • The significant change in fair value movements of energy derivatives has resulted from a rapid escalation in forward NSW Forward Price Flat Swap ( Dec-21 vs Dec-22) prices. Dec-22 Dec-21 150 • Derivative contracts are marked-to-market at the end of the 130 In
Slide 49: EnergyAustralia – Wholesale market conditions
EnergyAustralia – Wholesale market conditions Year Ahead Swap Prices (1) • Australia had unprecedented increases in the cost of energy over the first 300 NSW half of 2022 (impacted by the war in Ukraine, extreme weather events VIC aging domestic power stations and limitations on domestic coal and ga
Slide 50: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Customer Account Numbers Sales Volume & Revenue 2022 2021 2022 2021 Customer Account Numbers (000s) Sales Volume & Revenue Electricity Electricity Electricity Gas Total Electricity Gas Total Gas (PJ) Gas (PJ) (TWh) (TWh) Mass Market 1,602.3 851.2 2,453.5 1,587.4
Slide 51: EnergyAustralia – Customer operations
EnergyAustralia – Customer operations Supporting customers experiencing 65% of bills issued in 2022 hardship – were E-bills 31k customers utilising EnergyAssist • Compared with 5% in 2015 programme • Improving 4pts since 2021 19 Ombudsman complaints/10k accounts 28.4pts improvement in • 69% reductio
Slide 52: Apraava Energy – Financials
Apraava Energy – Financials HK$m Local Currency (Rs M) 2022 2021 2022 2021 Renewables 477 606 4,799 5,756 Thermal (Jhajjar) 281 406 2,827 3,856 Thermal (Paguthan & Corporate) (102) (152) (1,026) (1,444) Transmission 208 42 2,093 399 ACOI 864 902 8,693 8,567 Renewables 158 186 1,590 1,767 Thermal (Jh
Slide 53: 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 54: Southeast Asia and Taiwan – Financials
Southeast Asia and Taiwan – Financials HK$ Local Currency 2022 2021 2022 2021 HK$M HK$M M M Thermal 3 126 NT$12 NT$452 Renewables 18 71 THB80 THB290 Others (8) (14) ACOI 13 183 Thermal 3 126 NT$12 NT$452 Renewables 16 61 THB72 THB251 Others (8) (14) Operating earnings 11 173 Gain on sale of Vietnam
Slide 55: Southeast Asia and Taiwan ACOI
Southeast Asia and Taiwan High coal costs at Ho-Ping compensated by revised tariff adjustment mechanism effective from 1 July 2022 183 200 (13) 100 (47) ACOI (HK$m) 13 92% 3 excl. FX - 18 Thermal (116) (8) 6 Renewables (100) Others (200) 2021 FX Renewables Thermal Others 2022 Performance Outlook • L
Slide 56: CLP Group – Generation and energy storage portfolio – 31 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 57: CLP Group – Renewable generation portfolio – 31 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 58: 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 59: 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 60: Additional Resources
Additional Resources Scan or click on the QR codes to go to appropriate pages Annual Report Sustainability Climate-related Introductory Interim Results 2022* Report Disclosures Pack Presentation 2022* Report 2022* February 2023 August 2022 * To be published in early March 2023 59
Slide 61: Thank you
Thank you If you have any questions, please contact You can access this presentation and other IR team or email ir@clp.com.hk materials through our website or CLP IR App which can be downloaded onto your mobile device by clicking here or by scanning this code below. 60