• Consolidated Operating Revenue: RMB118.8 billion, a decrease of 5.73%.

• Net Profit Attributable to Shareholders: RMB7.45 billion, an increase of 18.16%.

• Earnings Per Share: RMB0.38 million.

• Domestic On-Grid Power Sales: 210.6788 billion kilowatt hours, a decrease of 0.22%.

• Average Tariff: RMB498.7 per megawatt hour, a decrease of 3.21%.

• Unit Fuel Cost: RMB300.51 per megawatt hour, a decrease of 11.8%.

• Installed Capacity: 138.57 gigawatts, with wind and solar capacity at 31.6 gigawatts.

• Low Carbon Clean Energy Capacity: 32.78% of total capacity.

• Tuas Power Profit Before Tax: RMB1.724 billion, a decrease of RMB1.166 billion.

• Sahiwal Power Plant Profit Before Tax: RMB429 million, an increase of RMB117 million.

• Warning! GuruFocus has detected 7 Warning Signs with HUNGF.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Huaneng Power International Inc (HUNGF) reported a net profit attributable to shareholders of RMB7.45 billion, marking an 18.16% increase.

• The company added 3,102.2 megawatts of new capacity, including significant additions in wind and solar power.

• The unit fuel cost decreased by 11.8% year-on-year, reflecting effective cost control measures.

• The performance of the Sahiwal Power Plant in Pakistan reached a record high, with a profit before tax increase of RMB117 million.

• The company is actively pursuing green energy development, with low carbon clean energy accounting for 32.78% of total capacity.

Negative Points

• Consolidated operating revenue decreased by 5.73%, indicating challenges in revenue growth.

• Domestic on-grid power sales decreased by 0.22%, and the average tariff decreased by 3.21%.

• Wind and solar curtailment rates increased, with wind curtailment at 5.56% and solar at 6.05%.

• The profit before tax of Tuas Power in Singapore decreased by RMB1.166 billion due to market conditions.

• The company faces challenges in balancing renewable energy capacity expansion with the high costs of decarbonization and renovation of thermal units.

Q & A Highlights

Q: Could you discuss the wind and solar tariffs and curtailment issues in the first half of the year, and what government policies might address these issues? A: The wind curtailment was 5.56%, and solar curtailment was 6.05%. The average tariff for wind decreased by 6.04% and solar by 9.77%. The government has released documents to add consumption facilities and ensure curtailment does not exceed 10%.

Q: What is the company's plan for decarbonization of coal units, and how will it balance renewable energy capacity with thermal unit renovations? A: The company is exploring biomass blending, green ammonia, and CCUS for decarbonization. However, these pathways currently do not offer sound returns, and subsidies may be needed to ensure profitability. The company is reserving projects and will report to authorities as policies develop.