51
CLP Group 2016 Interim Results Analyst Briefing 1 August 2016
CLP Group 2016 Interim Results
Analyst Briefing
1 August 2016
This presentation contains some comments about future events including our
expectations about the performance of CLP Group's business. The comments
are not audited and are based on a number of factors that we cannot
accurately predict or control. We cannot be certain that the comments will be
accurate or complete and so they should not be relied on. From time to time
as circumstances change we may update our website at www.clpgroup.com
and will update the Hong Kong Stock Exchange when relevant to comply with
our continuous disclosure obligations.
This presentation is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration. Any public offering of securities in the
United States must be made by means of a prospectus that contains detailed
information about the issuer and its management, as well as financial
statements.
Maps included in this presentation are indicative only. They are provided for
the purpose of showing the approximate location of CLP Group’s assets, and
do not purport to show the official political borders between different countries.
Disclaimer
2
Agenda
Performance Overview
Group Financial Performance and Operating Information
Performance by Business Units
Strategy and Outlook
Appendices
3
Focus • Delivery • Growth
Reliable performance in Hong Kong and further growth of
contribution from overseas businesses
Continued growth in low carbon investment
Progress on planned CCGT and EIA of offshore LNG terminal in Hong Kong
478 MW renewable projects committed or under construction
Solar portfolio now reaching towards 300 MW (July 2016)
Healthy cash flow and strong credit rating with positive outlook
4
Earnings and Dividends 1H2016 1H2015* Change
Operating earnings (HK$M) 6,149 5,525 11%
Total earnings (HK$M) 6,125 5,723 7%
Operating earnings per share (HK$) 2.43 2.19 11%
Total earnings per share (HK$) 2.42 2.27 7%
Dividends per share (HK$)
First interim dividend 0.57 0.55 4%
Second interim dividend 0.57 0.55 4%
Total interim dividends to date 1.14 1.10 4%
Financial Performance
* Comparative figures have been restated for the adoption of HKFRS 9 on hedge accounting
5
(1) Equity basis and capacity purchase arrangements. Also includes long-term power contracts from facilities in which we hold an equity interest.
(2) Equity basis and capacity purchase arrangements. 1H2015 data revised to reflect definition.
(3) Non-carbon emitting includes wind, hydro, solar and nuclear
(4) Unplanned customer minutes lost - average of the past 36 months
Operating Information 1H2016 1H2015 Change
Safety (Total Recordable Injury Rate) 0.10 0.22 0.12
Electricity sent out (GWh) (1) 38,524 37,579 945
Generation Capacity (MW) (2)
Total in Operation 21,767 21,657 110
Non-Carbon Emitting (3) 4,416 4,186 230
Under Construction 1,402 1,565 163
Customer Number (Thousand)
Hong Kong
Australia
2,500
2,640
2,472
2,618
28
22
Hong Kong local electricity sales (GWh) 15,519 15,431 0.6%
Reliability in Hong Kong (minutes lost pa) (4) 1.49 2.26 34%
Operating Information
6
Group Financial Performance
System Control Centre, Hong Kong
HK$M 1H2016 1H2015* Change
Revenue 38,671 39,985 3%
Operating Earnings
Hong Kong and related activities 4,432 4,130 7%
Local electricity business 4,276 4,052
Sales to Guangdong and others 69 (6)
PSDC and Hong Kong Branch Line 87 84
Overseas 2,057 1,666 23%
Mainland China 841 941
India 200 92
Southeast Asia and Taiwan 119 140
Australia 897 493
Others, net (340) (271)
Operating Earnings 6,149 5,525 11%
Items affecting comparability # (24) 198
Total Earnings 6,125 5,723 7%
Group Financial Performance
* Comparative figures have been restated for the adoption of HKFRS 9 on hedge accounting # Items affecting comparability in 1H2016 represent revaluation loss on Argyle Street site, partially offset by reversal of over-provision of capital gain tax.
1H2015 represent revaluation gain of Argyle Street site
8
HK$M 1H2016 1H2015* Change
Operating Earnings
(Attributable to CLP) 6,149 5,525 11%
Exclude:
Fair value
adjustments 61 22
Net finance costs # (1,142) (1,593)
Income tax expense (1,424) (1,314)
Non-controlling
interests (423) (419)
ACOI
9,077
8,829
3%
Adjusted Current Operating Income (ACOI)
Adjusted Current Operating Income or ACOI
ACOI equals EBIT excluding items affecting
comparability and fair value adjustments, but
includes Group’s share in net earnings from joint
ventures and an associate
Fair value adjustments
Mainly attributable to energy derivative contracts
in EnergyAustralia
Net finance costs #
Lower finance costs following significant debt
prepayment by EnergyAustralia after Iona asset
sale in December 2015
Lower average interest rate of the Group
Favourable fair value movements of financial
instruments
Income tax expense
Increase in line with increase in operating profits
Non-controlling interests
CSG’s 30% share of CAPCO
* Comparative figures have been restated for the adoption of HKFRS 9 on hedge accounting # Included the distribution to perpetual capital securities holders
9
HK$M 1H2016 1H2015
Hong Kong and related activities 6,328 6,074 Ongoing capital investments in line with Development Plan
Mainland China 1,029 1,100 Strong hydro and nuclear, new projects, lower coal contribution
India 648 614 Additional renewable contribution, thermal steady
Southeast Asia and Taiwan 118 139 Steady performance in Ho-Ping despite longer planned overhaul
Australia 1,317 1,174 Higher generation, lower D&A, lower retail contribution
Unallocated Group expenses (363) (272) Exchange loss in RMB deposits, higher corporate costs
Total 9,077 8,829 3% increase (or 8% normalised for scope and FX)
281
(21)
72
(13)
375
(52) (177) (217)
-2,000
0
2,000
4,000
6,000
8,000
10,000
1H2015 Scope FX Normalised1H2015
Hong Kong MainlandChina
India SEA &Taiwan
Australia UnallocatedGroup
Expenses
1H2016
Hong Kong
Mainland China
India
SEA & Taiwan
Australia
Unallocated Group Expenses
8,829 8,435
9,077
Adjusted Current Operating Income (ACOI)
HK$M
Increase on
like-for-like basis
after adjusting for
scope and FX
+8%
10
Performance by Business Units
Hong Kong Mainland China
India SEA and
Taiwan
Australia
Hong Kong ACOI
(1) Supply reliability based on average unplanned customer minutes lost per year
6,074
(27)
6,047 145 136 6,328
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1H2015 FX Normalised 1H2015 Return on higherfixed assets
Others 1H2016
HK$M
Operational Performance
Local sales 15,519 GWh, up 0.6%
Total sales 16,035 GWh, up 1.2%
Supply reliability > 99.999% (1)
Tariff reduced by 0.9%
effective Jan 2016
Financial Performance
Higher earnings reflecting
• Organic growth in fixed assets
• T&D + Retail HK$2.1 bn
• Generation of HK$0.9 bn
• Others include contribution from
Hong Kong Branch Line and
benefits related to property
assets
Outlook
Ongoing engagement with the
Government on new SOC post-2018
Final investment decision on CCGT
project during 2016
Energy Security
• Diversify gas supply
• Proceed with the EIA study for
offshore LNG terminal
Continue efforts in providing smarter
and greener energy solutions
+5%
12
1,100 1,050 1,029
(50)
119
(24) (2)
73 51
(234) (4)
0
200
400
600
800
1,000
1,200
1,400
1H2015 FX Normalised1H2015
Hydro Wind Solar NewProjects
Nuclear Coal-fired Others 1H2016
Mainland China ACOI HK$M
(2%)
Financial Performance
Renewables • Hydro power generation up 43%
• Direct sales schemes
• Additional contributions from newly commissioned wind and solar projects
Nuclear
• Strong performance
Coal-fired
• Reliable operations
• Lower dispatch and lower tariff, partially
offset by lower coal price
Carbon-free energy contributed over 70%
of ACOI, with Renewables around 35%
Operational Performance
Renewable projects performed well • Abundant rainfall at Huaiji Hydro
• Less wind resource in northern China offset by lower grid curtailment
• Existing solar projects stable
• New contributions from Xicun II solar and Xundian wind (92MW)
Stable operating performance at Daya Bay with lower planned outage YTD
Coal - lower utilisation hours of coal-fired generation units, particularly FCG I
Outlook
Complete and commission
FCG II (924MW), CLP Laizhou Wind and
Laiwu II Wind projects (99MW)
Sandu I Wind (99MW) commissioned in July
2016 and Sandu II Wind (99MW) to
commence construction in 2H2016
Maintain competitiveness and secure high
plant utilisation through direct sales in an
increasingly oversupplied market
Continue to develop non-carbon energy
Non-carbon
13
India ACOI
614 576
648
(38)
10
(18) (11)
91
0
200
400
600
800
1H2015 FX Normalised1H2015
Jhajjar Paguthan Wind NewProjects
1H2016
HK$M
+13%
Operational Performance
Jhajjar (Coal)
• Coal supply stable
• Plant availability over 88%
Paguthan (Gas)
• Stable availability at above 90%
Renewables (Wind)
• Wind resource similar to last year
• New contributions from Chandgarh and Tejuva projects (107MW)
Financial Performance
Jhajjar (Coal)
• Higher capacity revenue
Paguthan (Gas)
• Availability in line with last year
• Higher O&M cost due to planned outage
Renewables (Wind)
• Growth in earnings reflected additional new assets production
Outlook
Continue to engage Coal India to
improve coal quality at Jhajjar
Pursue possible expansion
opportunities at existing sites
Renewables
• Pursue targeted growth in renewables
• Take forward the first investment in 100MW Veltoor Solar project in Telangana
14
Southeast Asia and Taiwan ACOI
139
(8)
131
(11) (2)
118
0
100
200
1H2015 FX Normalised1H2015
Ho-Ping NED 1H2016
HK$M
(10%)
Operational Performance
Ho-Ping (Coal)
• High plant availability and high usage but longer planned outage
NED (Solar)
• Good performance and high availability
Financial Performance
Ho-Ping (Coal)
• Slight reduction in unit margin with lower tariff reflecting lower coal cost and longer planned outage
NED (Solar)
• Marginally lower solar resource
Outlook
Ongoing engagement with
Vietnamese Government on
Vinh Tan III and Vung Ang II
projects
Closely monitor development
in other Southeast Asian
countries
15
Operational Performance
Retail
• Lower volumes due to milder
weather and lower C&I customer
accounts
• Lower churn, lower Ombudsman
complaints, 20% E-billing reached
Wholesale
• Higher generation due to improved
wholesale market conditions
together with high availability and
utilisation at Mt Piper and Yallourn
Scope change represents Iona sale
Financial Performance
Retail
• Lower energy margins mainly
driven by higher discounting
• Lower bad & doubtful debt
Wholesale
• Higher prices, higher generation
• Lower D&A after 2015 impairment
• Hedge contract close out brings
forward benefit from 2H
Corporate
• Restructuring costs and
investment in Transformation
Outlook
Further investment in Transformation
activities across the business
Focus on retention of existing
customers
Volatile wholesale electricity market
expected to continue in the short
term
Tight gas market with higher prices
and continuing volatility
1,174
942
1,317
(177) (55)
(44)
613
(194)
0
200
400
600
800
1,000
1,200
1,400
1,600
1H2015 Scope FX Normalised1H2015
Retail Wholesale Corporate 1H2016
Australia ACOI HK$M
+40%
16
51.753.8
0
10
20
30
40
50
60
2014 2015
Tho
usa
nd
s
Net DebtHK$bn
7.4
9.0
0
2
4
6
8
10
1H2015 1H2016
Free Cash Flow HK$bn
3.9 4.1
0
2
4
6
8
10
1H2015 1H2016
Dividends paidHK$bn
3.9 3.9
1.10.4
1.01.4
0.40.3
6.46.0
0
2
4
6
8
10
1H2015 1H2016
Capital Investments
Maintenance capex Others
Growth capex SoC capex
HK$bn
32.4% 32.8%
0%
10%
20%
30%
40%
1H2015 1H2016
Net debt/Total Capital
+5%
-7%
+21%
+0.4%+4%
30 Jun 201631 Dec 2015 30 Jun 201631 Dec 2015
Interim Financial Dashboard
Credit Ratings Standard &
Poor’s Moody’s
CLP Holdings A-
Positive
A2
Stable
CLP Power
Hong Kong
A
Positive
A1
Stable
EnergyAustralia BBB
Positive
-
Arrows indicate recent changes 17
18
Outlook
Deliver safe, reliable and clean energy supply to Hong Kong at
reasonable, internationally competitive cost
Record safety performance and supply reliability maintained at 99.999%
Continue to meet tighter emission targets
Average Total Tariff reduced in January 2016 & Basic Tariff lower than 1998
Discussions ongoing with Government on new SoC post-2018
Hong Kong – Excellence in Performance
19
Environmental Permit issued for new CCGT in June 2016
Offshore LNG Terminal
Environmental Impact Assessment study is currently underway
Access international markets and diversify gas supply
Contributing to Government Climate Change Targets for 2020 and beyond
Hong Kong – Infrastructure and Development
23 Black Point Power Station, Hong Kong Source: Höegh LNG
Renewables
25
Renewables portfolio* exceeds 3,500MW capacity and
continues to grow
81 MW wind commissioned during 1H2016
Solar acquisition in India, construction commenced
Sihong Solar acquisition in China on 11 July
478 MW of wind and solar committed or
under construction
Non-carbon emitting generation* (renewables and
nuclear) now represents 21% of portfolio capacity
* Equity interest and capacity purchase arrangements, including projects under construction at period end
Xicun Solar Power Station, Yunnan, China
0
1,000
2,000
3,000
4,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
MW Renewables Portfolio
(Equity generation & capacity purchase arrangements)
Embracing Innovation and New Technology
Information Education Tools / Support Enablers
Australian NextGen Products
Hong Kong – Smarter and Greener
Embedded networks
22
Battery Storage Rooftop Solar
Mainland China
Australia
Southeast Asia
Outlook – Focus • Delivery • Growth
Wholesale market likely to remain volatile
Continue addressing value restoration
across the integrated business
Hong Kong
Maintain competiveness of
existing portfolio
Further growth in earnings
from non-carbon emitting
sources
Continue to progress
opportunities in Vietnam
Investment in infrastructure
to meet demand growth and
climate change targets
Progress post-2018 SoC
arrangements
India
Maintain earnings from
existing assets
Progressively add
wind and solar
23
Sihong Solar Power Station, China
Questions and Answers
Appendices
Xundian Wind Farm, Yunnan, China
30 Jun 2016 31 Dec 2015
HONG KONG HK$M HK$M
Total borrowings of CLPH, CLPP, CAPCO & PSDC 42,467 41,480
Minus: Bank balances and liquid funds (2,198) (2,425)
Net Debt 40,269 39,055
OVERSEAS
Total borrowings of EnergyAustralia, India and Mainland China
subsidiaries (non-recourse to CLPH)
14,860 14,003
Minus: Bank balance and liquid funds (1,297) (1,374)
Net debt 13,563 12,629
CONSOLIDATED total borrowings of CLP Group 57,327 55,483
Minus: Consolidated Group’s bank balance and liquid funds (3,495) (3,799)
Consolidated Net debt 53,832 51,684
Total Debt/Total Capital 34% 34%
Net Debt/Total Capital 33% 32%
CLP Group – Financial Obligations at a Glance
Moderate increase in net debt amount and net debt/total capital mainly related
to additional loans drawdown for capital expenditure and equity investments
26
A
Positive
A
Positive
CLP Group – Credit Ratings
Long term Rating
Foreign Currency
Outlook
Local Currency
Outlook
Short term Rating
Foreign Currency
Local Currency
S&P Moody’s S&P Moody’s S&P
CLP Holdings CLP Power EnergyAustralia
A-2
A-2
P-1
P-1
A-1
A-1
-
-
P-1
P-1
A–
Positive
A–
Positive
A2
Stable
A2
Stable
Arrows indicate recent changes. S&P changed the rating outlooks of CLPH and CLP Power to
positive from stable in May 2016, and affirmed their ratings. Moody’s affirmed the credit ratings of
CLPH and CLP Power in May and March 2016 respectively with stable outlooks. S&P upgraded
the credit rating of EnergyAustralia to BBB from BBB- and outlook revised to positive from stable
in July 2016 which reflects the strengthening of financial risk profile after Iona asset sale
27
A1
Stable
A1
Stable
BBB
Positive
BBB
Positive
• Ample liquidity with undrawn facilities of HK$4.3bn and HK$1.9bn cash as at 30 June 2016
• Rearranged HK$2.5bn 2-year bank facilities
CLP Holdings
• New financing obtained at attractive interest rates. CLP Power Hong Kong arranged HK$4.65bn 5-year bank facilities
CLP Power Hong Kong
• Continued financing at competitive terms. Tapping from diversified resources including offshore RMB construction bridge facilities
Mainland China
• Lower interest margins (by 0.2% to 1.6%) after successful refinancing. Jhajjar Power Ltd arranged Rs.2.5bn (HK$288m) working capital facilities to support operation, and CLP Wind Farms (India) arranged Rs.1bn (HK$115m) 9-year bank loan to replace short term loans of three commissioned wind projects
India
• Stronger balance sheet and greater financing flexibility after material deleveraging by using a portion of proceeds from Iona asset divestment to early repay significant external debt in December 2015. Syndicated loan facility reduced by A$450m (HK$2.6bn) and intercompany debt repaid by A$426.5m (HK$2.4bn)
EnergyAustralia
CLP Group – Highlights of Financing Activities
m – million
bn - billion
28
1) Loan balance between two and five years as at 30 June 2016 included loan drawdown with current
tenor less than one year under revolving facility with maturity falling beyond one year
CLP Group – Loan Balances By Type and Maturity
57% 43%
57%
43%
Proportion of debt on fixed and floating rate
June 2016
December 2015
Fixed rate Floating rate
29
Jun 2016 Jun 2016
CLP Group – Reconciliation of Operating Earnings to ACOI
* Including net fair value loss/(gain) on financing related derivative financial instruments, and other net exchange loss/(gain) on financing activities and distribution to perpetual
capital securities holders # Including net fair value loss/(gain) on derivative financial instruments relating to transactions not qualifying as hedges and ineffectiveness of cash flow hedges
^ Comparative figures have been restated for the adoption of HKFRS 9 on hedge accounting
HK$M Hong Kong Mainland China India SEA & Taiwan Australia Unallocated
Items Group total
2016 Interim results
Operating earnings 4,432 841 200 119 897 (340) 6,149
Add back
Non-controlling interests 407 16 - - - - 423
Net finance costs/(income) * 609 86 358 (1) 113 (23) 1,142
Income tax expense 876 86 90 - 372 - 1,424
Fair value adjustments # 4 - - - (65) - (61)
ACOI 6,328 1,029 648 118 1,317 (363) 9,077
2015 Interim results^
Operating earnings 4,130 941 92 140 493 (271) 5,525
Add back
Non-controlling interests 417 2 - - - - 419
Net finance costs/(income) * 675 96 392 (1) 432 (1) 1,593
Income tax expense 863 61 130 - 260 - 1,314
Fair value adjustments # (11) - - - (11) - (22)
ACOI 6,074 1,100 614 139 1,174 (272) 8,829
30
(1) Capital investments include fixed assets, leasehold land and land use rights,
investment properties, intangible assets and investments in and advances to
joint ventures
(2) Capital expenditure on fixed assets and leasehold land and land use rights
are further analysed into
• SoC capex - capital expenditure related to the SoC business
• Growth capex - capital expenditure for additional generation capacity
• Maintenance capex - capital expenditure other than the above
(3) Capital investments on investment properties and intangibles assets, and
investments in and advances to joint ventures
(4) Net of bank balance, cash and other liquid funds
Cash flow
Free cash flow increased by HK$1.6 billion primarily
due to increase in inflows from SoC, improvement in
working capital from Australia and lower finance costs
paid offset by lower dividend from Fangchenggang
Capital Investments
HK$3.9 billion SoC capex on cash basis related to
enhancing transmission and distribution networks,
generation and customer services in Hong Kong
Growth capex mainly related to our renewable
projects in Mainland China
Maintenance capex represents capital expenditure on
existing power plants in Australia
Net Debt/Total Capital
Moderate increase in net debt amount and net
debt/total capital mainly related to additional loans
drawdown for capital expenditure and equity
investments
CLP Group – Cash Flow and Financial Structure
31
HK$M 1H2016 1H2015
Cash Flow
EBITDAF 12,301 12,389
Less: Items affecting comparability 107 (198)
Recurring EBITDAF 12,408 12,191
Less: Movement in SoC items 124 (362)
Less: Movement in working capital & others (3,037) (4,696)
Funds from operations 9,495 7,133
Less: Tax paid (557) (399)
Less: Net finance costs paid (1,178) (1,573)
Less: Maintenance capex (301) (439)
Add: Dividends from joint ventures & an associate 1,579 2,718
Free Cash Flow 9,038 7,440
Capital Investments (1)
• SoC capex (2)
3,886 3,872
• Growth capex (2)
439 1,085
• Maintenance capex (2)
301 439
• Others (3)
1,341 1,044
Total 5,967 6,440
Dividend paid 4,093 3,916
End of period 30 Jun
2016
31 Dec
2015
Net Debt (4) (HK$M) 53,832 51,684
Net Debt/Total Capital (%) 33% 32%
Hong Kong – Growing Business Scale
Generation Transmission Distribution Retail
8,888 MW of installed
capacity
> 15,100 km of transmission and
high voltage distribution lines
> 225 primary and > 14,100
secondary substations
During 1H2016:
Local electricity sales increased 0.6% to
15,519 GWh
No. of customers increased by 28k to
2,500k
Major infrastructure projects ongoing to
meet demand
Replaced 132kV substation in Tsim Sha
Tsui
Completed the 2nd 400kV Yuen Long –
Lai Chi Kok circuit to reinforce 400kV
power networks
Over 150 km of new transmission and
distribution power cables & over 100 new
substations added
New online portal “Eco Power 360” provides
customers with benchmarking of actual and
projected electricity usage
We generate, transmit and distribute electricity to over 80% of Hong Kong’s
population through Kowloon, the New Territories and Lantau Island
16,035 GWh sold and
2.5 million customer accounts
32
26%
41%
27%
6% 28%
40%
27%
5%
1H2016
Total Capital Expenditure in line with Development Plan
Capex incurred up to June 2016 of HK$18.5bn, vs. Development Plan from January 2014 to September 2018: HK$34.1bn
Hong Kong – Electricity Sales and Capex
Electricity Sales
GWh 1H2016 1H2015 Change
Residential 4,244 4,031 5.3%
Commercial 6,246 6,308 (1.0%)
Infrastructure &
Public Services 4,202 4,221 (0.5%)
Manufacturing 827 871 (5.1%)
Total Local Sales 15,519 15,431 0.6%
Export Sales 516 407 26.8%
Total Sales 16,035 15,838 1.2%
Capital Expenditure
HK$M 1H2016 1H2015 Change
CLP Power HK 2,146 2,188 (1.9%)
CAPCO 933 1,089 (14.3%)
Total Capex 3,079 3,277 (6.0%)
5,6155,152
1,188720
1,3681,735
1,783
1,079
280
2,146
5,650 5,680
653
817 743
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FY2012 FY2013 FY2014 FY2015 1H2016
6,838 6,400
6,983 6,887
2,799
CAPCO - JV partner’s share CAPCO - CLP’s share CLP Power
2014-2018
DP
HK$M
Sales Mix
1H2015
33
Residential
Commercial
Infra & Public services
Manufacturing
Nitrogen Oxide (NOx) Sulphur Dioxide (SO2) Respirable Suspended Particulates (RSP)
Environmental Improvement
Over 85% emissions reduction even with 83% increase in electricity sales since 1990
Hong Kong – Tariff, Reliability, Fuel Mix & Environmental Improvement
0.0
0.5
1.0
1.5
2.0
2.5
CLP Power Singapore Sydney London New York
Low Tariff
Remarks:
Comparison based on average monthly domestic consumption of 275kWh
Tariff and exchange rate at Jan 2016
HK$/kWh High Reliability
0.5 1.5
17 17
28
0
10
20
30
40
50
0.5
Remarks: 2013-2015 average for CLP Power, 2012-2014 average for all other cities There is no overhead lines in Singapore
CLP Power Sydney
(CBD)
New York London Singapore
More Reliable Less Reliable
Unplanned customer
minutes lost per year
34
56%
15%
28%
1%
42%
25%
32%
1%
Coal Gas Nuclear Others (e.g. Oil)
2015
2014
Fuel Mix (based on MWh
generated/purchased)
Electricity Sales
The average foreign exchange rates used to convert Mainland China Segment earnings to Hong Kong dollars
are 1.24658 for 1H2015 and 1.18594 for 1H2016. Note that in the ACOI variance analysis presented in the
body of the presentation 1H2015 earnings are adjusted for changes in scope and foreign exchange before
period on period variance in underlying performance is illustrated
Mainland China – Financials (HK$)
HK$M Operating/Total Earnings ACOI
1H2016 1H2015 1H2016 1H2015
Renewables projects 233 118 386 232
- Wind 111 94 145 133
- Hydro 71 (15) 169 53
- Solar 51 39 72 46
Nuclear power business 401 352 422 371
Coal-fired projects 273 520 287 547
- Shandong 169 242 179 256
- Guohua 100 178 103 185
- Fangchenggang 4 100 5 106
Operating expenditure (51) (50) (51) (51)
Earnings from operations 856 940 1,044 1,099
Development expenditure (6) (2) (6) (2)
RMB exchange loss (9) 3 (9) 3
Operating earnings /ACOI 841 941 1,029 1,100
Reversal of over-provision on capital gain tax
83 -
Total earnings 924 941
Mainland China
35
Mainland China – Financials (Local Currency)
RMB’M Operating/Total Earnings ACOI
1H2016 1H2015 1H2016 1H2015
Renewables projects 197 95 325 187
- Wind 94 76 122 107
- Hydro 60 (12) 142 43
- Solar 43 31 61 37
Nuclear power business 338 282 356 298
Coal-fired projects 230 417 242 438
- Shandong 143 194 151 205
- Guohua 84 143 87 148
- Fangchenggang 3 80 4 85
Operating expenditure (43) (40) (43) (41)
Earnings from operations 722 754 880 882
Development expenditure (5) (2) (5) (2)
Operating earnings /ACOI 717 752 875 880
Reversal of over-provision on capital gain tax
70 -
Total earnings 787 752
Mainland China
36
520
273
547
287
352
401
371
422
118
233
232
386
-49 -66 -50 -66
-200
0
200
400
600
800
1,000
1,200
1H2015 1H2016 1H2015 1H2016
Operating Earnings
China remains a primary growth market for CLP
Government support for renewable development within the Five Year Plan, Power Sector Reform and from COP21
provides strong impetus to investors such as CLP to make selective investments in renewables
CLP’s focus on the development of renewables and high-efficiency coal projects means we are well-positioned to
capitalise these opportunities
In 1H2016, CLP has completed the following projects
Commenced commercial operation of Xundian Wind (49.5MW) and Sandu I Wind (99MW) on 1 January and 1 July
2016 respectively
Acquired 49% remaining shareholding of Sihong Solar (93MW) from PRC partner on 11 July 2016
CLP is continuing to develop the following projects
Construction of FCG II (1,320MW, CLP share 924MW) ultra-supercritical plant, target to commission in 4Q2016
Committed or commenced construction of 3 wholly-owned wind farms - Sandu II (99MW) in Guizhou, CLP Laizhou
(49.5MW) and Laiwu II (49.5MW) in Shandong
Mainland China – Renewable and Power Generation
(1) CLP equity interest and capacity purchase rights
Contributions of renewable energy in ACOI were higher than
coal and both earnings & ACOI were higher than 1H2015
Renewables Nuclear Coal Others
ACOI HK$M
0
2,000
4,000
6,000
8,000
10,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
MW
Coal-fired Nuclear Renewables Under construction
CLP capacity(1) in Mainland China
37
India – Financials
HK$ Local Currency
1H2016 1H2015 1H2016 1H2015
HK$M HK$M INR’M INR’M
ACOI
Coal-fired 235 240 2,037 1,945
Gas-fired 115 141 997 1,143
Renewables 298 233 2,584 1,888
Total 648 614 5,618 4,976
Operating earnings
Coal-fired 51 (13)* 442 (105)
Gas-fired 97 85 841 689
Renewables 52 20 451 162
Total 200 92 1,734 746
India The average foreign exchange rates used to convert Indian Segment earnings to Hong Kong dollars
are 0.1234 for 1H2015 and 0.1153 for 1H2016. Note that in the ACOI variance analysis presented
in the body of the presentation 1H2015 earnings are adjusted for changes in scope and foreign
exchange before period on period variance in underlying performance is illustrated
38
* Restated for the adoption of HKFRS 9 on hedging accounting
India – Renewable Generation
India is a developing economy with a need for new generation capacity to address a
continuing shortage of power
This provides us with a range of investment opportunities and India is a primary
growth market for CLP
We are one of the largest foreign investors in the power sector, and the largest
developer of wind power in India
Our renewables generation portfolio in India continues to grow
101 MW of Yermala Wind under construction
Veltoor Solar under construction
Increasing contribution from new wind assets
Coal Gas Renewables
ACOI HK$M
0
200
400
600
800
1,000
1,200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
MW CLP Renewable Portfolio in India
Commissioned - Wind Under Construction - Wind Under Construction - Solar
(13) 51
240 235 85
97
141 115
20 52
233 298
-200
0
200
400
600
800
1H2015 1H2016 1H2015 1H2016
Operating Earnings
39
Southeast Asia & Taiwan – Financials
The average foreign exchange rates used to convert SEA & Taiwan Segment earnings to Hong
Kong dollars are 0.2350 and 0.2499 for 1H2015 and 0.2192 and 0.2376 for 1H2016 for Thai Baht
and New Taiwan Dollars respectively. Note that in the ACOI variance analysis presented in the
body of the presentation 1H2015 earnings are adjusted for changes in scope and foreign exchange
before period on period variance in underlying performance is illustrated
SEA & Taiwan
HK$ Local Currency
1H2016 1H2015 1H2016 1H2015
HK$M HK$M M M
ACOI
Coal-fired 102 119 NT$431 NT$474
Renewables 31 35 THB145 THB151
Operating expenditure (6) (7) - -
Development expenditure (9) (8) - -
Total 118 139
Operating earnings
Coal-fired 102 119 NT$431 NT$474
Renewables 31 35 THB145 THB151
Operating expenditure (6) (7) - -
Development expenditure (8) (7) - -
Total 119 140
40
The average foreign exchange rates used to convert Australian Segment earnings to Hong Kong dollars
are 6.0217 for 1H2015 and 5.7131 for 1H2016. Note that in the ACOI variance analysis presented in
the body of the presentation 1H2015 earnings are adjusted for changes in scope and foreign exchange
before period on period variance in underlying performance is illustrated.
Australia – Financials
Australia
HK$ Local Currency
1H2016 1H2015 1H2016 1H2015
HK$M HK$M A$M A$M
EBITDAF (before items
affecting comparability) 1,907 1,938 334 322
Depreciation & Amortisation (590) (764) (103) (127)
ACOI
Retail 1,285 1,401 225 233
Wholesale 874 455 153 76
Corporate (842) (682) (147) (114)
Total 1,317 1,174 231 195
Fair value adjustments 65 11 11 2
Net finance costs (113) (432) (20) (72)
Income tax expense (372) (260) (65) (43)
Operating earnings 897 493 157 82
41
Successful implementation of the NPS
project including new complaints handling
procedures and ongoing stability in IT
platforms has resulted in Ombudsman
complaints reducing at a faster rate in EA
than industry
Manila contact centre successfully
commenced operating in March and Mill
Park contact centre on target to close in
September
Digitisation of activities continue with good
progress on electronic billing and welcome
packs
Mass Market Bad and Doubtful Debt as a
% of Revenue has continued to improve
with further improvements in debtor
management and collections
Improved Customer Experience and Reduced Costs
Australia – Retail Operations
42
1Weighted Average Mass Market is the average accounts of our mass market customer base between 31 Dec to 30 June
Note: Individual items and totals are rounded to the nearest appropriate number. Some totals may not add down the page due to rounding of individual components
Mass Market Customer accounts stable
despite strong competition in the retail
market
Decreased sales volume and revenue
driven by lower sales to low margin
Commercial & Industrial customers
EnergyAustralia continues to have below
market churn rates (blended across
electricity and gas) in the key states of
Victoria and New South Wales
Australia – Retail Operations
43
Electricity Gas Total Electricity Gas Total
Total Mass Market 1,774.7 848.1 2,622.8 1,770.5 826.7 2,597.2
Commercial & Industrial 16.9 0.4 17.4 20.1 0.4 20.5
Total Account Numbers 1,791.7 848.5 2,640.2 1,790.6 827.1 2,617.7
Weighted Avg Mass Market1 1,775.9 846.0 2,621.9 1,775.7 822.9 2,598.5
Customer Account Numbers (‘000) 1H2016 1H2015
Electricity (TWh) Gas (PJ) Electricity (TWh) Gas (PJ)
Mass Market 5.2 14.1 5.4 16.0
Commercial & Industrial 4.9 15.5 5.6 17.2
Total Sales Volume 10.1 29.6 11.0 33.2
Sales Revenue (A$m) 1,912 460 2,275 483
Sales Volumes and Revenue1H2016 1H2015
Australia – Wholesale Market Conditions
0
20
40
60
80
100
120
$/M
Wh
NEM monthly average spot prices Jan-15 to Jun-16
NSW VIC
Wholesale prices are higher due to both structural and temporary supply side factors
Planned and unplanned power station outages in NSW, Victoria and Basslink outage in Tasmania
Higher gas prices from LNG, increased gas fired generation and supply constraints
Closure of Northern Power Station in South Australia
Energy oversupply is likely to continue but renewables integration into the grid will continue to pose
challenges, particularly in South Australia, and may provide countervailing pricing pressure
Demand outlook remains flat
New renewables build to satisfy regulatory targets
Growth in battery storage and off-grid solutions
44
Taiwan Hong Kong
Australia
India
TAIWAN – total 264MW
Operational
Ho-Ping 1,320/264 MW (c)
China
AUSTRALIA – total 4,967MW*
Operational
Yallourn 1,480/1,480 MW (c)
Mount Piper 1,400/1,400 MW (c)
Hallett 203/203 MW (g)
Ecogen 966/966* MW (g)
Tallawarra 420/420 MW (g)
Wind Projects (a) 583/495* MW (w)
Wilga Park 16/3 MW (g)
HONG KONG – total 6,908MW*
Operational
Castle Peak 4,108/4,108* MW (c)
Black Point 2,500/2,500* MW (g)
Penny’s Bay 300/300* MW (d)
CLP Group – Generation Portfolio – June 2016
Thailand
• Station Name Gross MW / CLP Equity MW
* including capacity purchase
# Solar projects in AC output Fuel Source: (c) – coal-fired (g) – gas-fired (w) – wind (h) – hydro (n) – nuclear (d) – diesel (s) – solar
INDIA – total 3,049MW
Operational
Jhajjar 1,320/1,320 MW (c)
Paguthan 655/655 MW (g)
Wind Projects 924/924 MW (w)
Under Construction / Committed
Wind Project 101/101 MW (w)
Solar Project# 100/49 MW (s)
CHINA – total 7,960MW*
Operational
Daya Bay(b) 1,968/1,380* MW (n)
Pumped Storage 1,200/600* MW (h)
Fangchenggang I 1,260/882 MW (c)
SZPC 3,060/900 MW (c)
Guohua 7,660/1,350 MW (c)
& Shenmu
Hydro Projects 509/489 MW (h)
Wind Projects 1,183/649 MW (w)
CGN Wind 1,993/283 MW (w)
Solar Projects # 262/175 MW (s)
Under Construction / Committed
Fangchenggang II 1,320/924 MW (c)
Wind Projects 297/297 MW (w)
CGN Wind 200/31 MW (w)
THAILAND – total 21MW
Operational
NED Solar # 63/21 MW (s)
18,181 Equity MW and 4,988MW Capacity Purchase (total 23,169MW)
(a) Including CLP-owned Cathedral Rocks Wind, and capacity purchases arrangements from Waterloo Wind, Boco Rock Wind, Taralga Wind, Mortons
Lane Wind and Gullen Range Wind
(b) Agreement has been reached to increase proportion of supply to Hong Kong to about 80% from 2015 to 2018, with the remainder continuing to be
sold to Guangdong
45
CLP Group – Renewable Generation Portfolio – June 2016
AUSTRALIA – total 495MW
Operational
Waterloo 111/56* MW (w)
Cathedral Rocks 66/33 MW (w)
Boco Rock 113/113* MW (w)
Taralga 107/107* MW (w)
Mortons Lane 20/20* MW (w)
Gullen Range 166/166* MW (w)
Khandke 50/50 MW (w)
Samana I & II 101/101 MW (w)
Saundatti 72/72 MW (w)
Theni I 50/50 MW (w)
Theni II 50/50 MW (w)
Harapanahalli 40/40 MW (w)
Andhra Lake 106/106 MW (w)
Sipla 50/50 MW (w)
Bhakrani 102/102 MW (w)
Mahidad 50/50 MW (w)
Jath 60/60 MW (w)
Tejuva 101/101 MW (w)
Chandgarh 92/92 MW (w)
Yermala (a) 101/101 MW (w)
Veltoor # (b) 100/49 MW (s)
Changdao 27/12 MW (w)
Weihai I & II 69/31 MW (w)
Nanao II & III 60/15 MW (w)
Shuangliao I & II 99/49 MW (w)
Datong 50/24 MW (w)
Laizhou I 41/18 MW (w)
Changling II 50/22 MW (w)
Guohua Wind 395/194 MW (w)
Qujiagou 49/12 MW (w)
Mazongshan 49/12 MW (w)
Qian’an I & II 99/99 MW (w)
CGN Wind 1,993/283 MW (w)
Penglai I 48/48 MW (w)
Chongming 48/14 MW (w)
Laiwu I 50/50 MW (w)
Xundian I Wind 49/49 MW (w)
Jiangbian 330/330 MW (h)
Huaiji 129/109 MW (h)
Dali Yang_er 50/50 MW (h)
Jinchang Solar # 85/43 MW (s)
Xicun I & II Solar # 84/84 MW (s)
Sihong Solar # (c) 93/48 MW (s)
Sandu I Wind 99/99 MW (w)
Sandu II Wind 99/99 MW (w)
CLP Laizhou I Wind 49/49 MW (w)
Laiwu II Wind 50/50 MW (w)
CGN Wind 200/31 MW (w)
Under Construction / Committed
Wind 328 MW
CHINA – total 1,924MW
THAILAND – total 21MW
Operational
NED Solar # 63/21 MW (s)
(a) Project has been downsized from 149MW to 101MW due to land issues
(b) CLP India has the option to acquire the remaining 51% in the future
(c) Acquisition of remaining 49% interest was completed on 11 July 2016
Operational
Wind 924 MW
Under Construction / Committed
Wind 101 MW Solar 49 MW
INDIA – total 1,074MW
Please update to
1H2016
46
Australia
India
China
Thailand
Solar project (s)
Hydro projects (h)
Wind projects (w)
3,052 Equity MW and 462MW Capacity Purchase (total 3,514MW) - 17% of CLP total equity generation portfolio
• Station Name Gross MW / CLP Equity MW
* including capacity purchase # Solar projects in AC output
Operational
Wind 932 MW Hydro 489 MW Solar 175 MW
CLP Group – Energy Sent Out
47 * Equity basis and capacity purchase arrangements
841 816
16,477 16,659
3,7802,839
8,989
10,886
7,492 7,324
-5,000
0
5,000
10,000
15,000
20,000
25,000
1H2015 1H2016 1H2015 1H2016 1H2015 1H2016 1H2015 1H2016 1H2015 1H2016
Hong Kong Mainland China India SEA Australia
GWh
Energy Sent Out*
Pumped Storage Nuclear Coal Gas Wind Solar Hydro Others
Coal
65%
Gas
13%
Others
<1%
Wind
6%
Solar
<1%
Hydro
2% Nuclear
14%
CLP 2016 Interim Equity Generation
as Sent Out
Capacity by
Energy Type
Total
Equity MW
(a) + (b)
%
Equity MW
in operation
(a)
%
MW under construction
and development/
financially committed
(b)
%
Coal 11,396 62% 10,472 57% 924 5%
Gas 3,031 17% 3,031 17% - -
Nuclear1 492 3% 492 3% - -
Diesel 210 1% 210 1% - -
Wind 2,318 13% 1,889 10% 429 2%
Hydro 489 3% 489 3% - -
Solar 245 1% 196 1% 49 <1%
Total operating 18,181 100% 16,779 92% 1,402 8%
18,181 Equity MW Attributable to CLP Group
CLP Group – Equity MW by Fuel Mix – June 2016
Note 1: CLP owns 25% of GNPJVC which owns Daya Bay units 1 and 2
48
Analyst Presentations
Additional Resources
For more information please see our Integrated Annual Report,
online Sustainability Report and recent Results Announcements, all available at
www.clpgroup.com or contact the Investor Relations team at [email protected]
49
Notes
Notes
