Huaneng Power International, Inc. Announces 2011 Interim Results

BEIJING, August 10, 2011 /PRNewswire-Asia/ -- Huaneng Power International, Inc. (the "Company") (NYSE: HNP？？？HKEx: 902？？？SSE: 600011) announces the unaudited operating results for the six months ended 30 June 2011.

For the six months ended 30 June 2011, the Company and its subsidiaries recorded consolidated operating revenue of RMB64.054 billion(equivalent to approximately USD9.898 billion, based on the USD-RMB exchange rate of USD1 to RMB6.4716 as at 30 June 2011), representing an increase of 31.11% compared to the same period of 2010. The profit attributable to equity holders of the Company was RMB1.131 billion (equivalent to approximately USD 0.175billion), representing a decrease of 41.48% compared to the same period last year. The earnings per share were RMB0.08 (equivalent to approximately USD0.01) and earnings per ADS were RMB3.20 (equivalent to approximately USD0.49). The net asset value per share (excluding non-controlling interests) was RMB3.71. The decrease in net profit was mainly due to the increase of fuel prices and the increase of interest rate of RMB borrowings.

During the first half of 2011, the Company overcame the adverse effects arising from high fuel prices, tight money supply and downward movement of the capital market. The Company focused on enhancing economic efficiency, actively addressed the changes in the operating environment, and achieved new developments in various aspects including production safety, cost control, energy saving and environmental protection, and capital operation.

As regards power generation, during the first half of this year, the Company's power plants within China achieved a total power generation of 152.404 billion kWh on consolidated basis, representing an increase of 28.25% over the same period of last year; the total power generation of Tuas Power Ltd. in Singapore accounted for a market share of 26.7%, representing an increase of 2.2 percentage points compared to the same period of last year.

As regards cost control, during the first half of 2011, the market coal purchase price remained at a high level which was significantly higher than that in the same period of last year. The Company adopted various measures including optimizing the purchase structure, increasing the purchase volume of economical coal and rationalizing inventories arrangements with an aim to reducing average coal purchase prices.

As regards energy saving and environmental protection, the Company attaches great importance to energy saving and environmental protection work. During the "Eleventh Five-year Plan" period, all coal-fired generating units of the Company are equipped with desulphurization facilities and over 30% of the capacity of coal-fired generating units is equipped with denitrification facilities. At the same time, the Company has strengthened the operation and maintenance of the desulphurization facilities of coal-fired generating units so as to increase the operating efficiency and commissioning rate of the facilities.

As regards project development and construction, during the first half of 2011, the Jiangsu Jinling CCGT co-generation project, Liaoning Changtu Taiping Wind Power Plant project and Yunnan Laochang Mining Area Bailongshan Coal Mine No.2 Shaft project of the Company obtained approval. Liaoning Wafangdian Zhaotun Wind Power Plant (48 MW) commenced operation on 18 June 2011. To date, the controlling generation capacity and the equity-based generation capacity of the Company are 54499 MW and 51032.5 MW, respectively.

As regards capital operation, on 29 June 2011, the Company signed the Huaneng Jilin Biological Power Generation Limited Company Interest Transfer Agreement with Huaneng Jilin Power Generation Company Limited ("Huaneng Jilin Company") and China Huaneng Group ("Huaneng Group"). Pursuant to the agreement, the Company will transfer the interest of Huaneng Jilin Biological Power Generation Company Limited ("Jilin Biological") to Huaneng Jilin Company, for which Huaneng Jilin Company will pay a consideration of RMB106,303,200 to the Company. At the same time, the central state-owned capital management budget on energy saving and emission reduction fund in the sum of RMB71,350,000 allocated to Jilin Biological by Huaneng Group through the Company shall no longer be injected into the capital of the Company. Huaneng Group will enter into a separate agreement with Huaneng Jilin Company in relation to the treatment of the special funds.

In the second half of the year, the overall economic situation of China is good and the economy is developing following the macroeconomic control policy. The government will continue to maintain the continuity and stability of the macroeconomic policy and continuously enhance the pertinence and flexibility of the policy.

As regards power market, national power demand maintained a relatively rapid growth trend due to the steady and relatively fast development of the national economy. The national annual power generation is expected to increase more than 12%. Most of the Company's power plants are located along riverside or seaside in southeast China, where the power market condition is better than that of the nationwide level as a whole. In addition to the completion of the planned power generation for domestic units of 315 billion kWh set out at the beginning of this year, the Company strives to enable the annual power generation utilization hours of coal-fired generating units to exceed the average levels of the places where the coal-fired generating units are located. However, during the second half of the year, the power market faces certain uncertainties. Following the further realization of the effect of monetary tightening structure adjustment and the continuous commencement of operation of new generating units, power supply capability will be further enhanced and the tense power supply and demand situation will be further eased, and the growth rate of power generation will slow down gradually. At the same time, the Company will comply with higher requirements in future development projects after the government's restructuring of the energy sector and vigorous promotion of clean energy and renewable energy development.

As regards coal market, the National Development and Reform Commission strengthened supervision on the fulfillment rates and price settlement of key coal supply contracts of certain coal suppliers. The Company will actively implement and continuously strive to obtain the support of State policies in order to increase the overall profitability. During the second half of the year, the coal supply and demand tend to balance generally. Coal prices will remain at high levels. The Company will formulate purchase strategy and optimize purchase structure according to market changes; continue to strengthen cooperation with large State-owned coal enterprises and broaden major supply channels; strengthen economical coal purchase; capitalize on the function of two resources in the international and domestic markets; and actively explore new channels to obtain coal resources and strive to control fuel costs.

As regards energy saving and environmental protection, the Company always strictly complies with the state's policies and regulations on energy saving and environmental protection work. The Company applies advanced technologies to new generating units to develop advanced, large capacity and effective coal-fired generating units and effective cogenerating units, strives to increase the ratio of clean energy including wind power and hydropower, expedites the denitrification renovation of coal-fired generating units and strengthens the operation management of the environmental protection facilities of existing generating units, so as to effectively reduce pollutant emission and control costs on energy saving and environmental protection.

As regards capital market, the monetary policy of the government has changed from "moderately loose" to "stable". During the year, the Central Bank raised the deposit reserve ratio six times successively and raised the loan interest rate three times. Large banks also further strengthened risk control and enterprise financing difficulty and financing costs further increased.

The major tasks of the Company for the second half of 2011 include: to strengthen safe production and management and ensure the safe, stable and economical operation of its generating units; to strengthen the sales force and exceed the power generation target on the basis of ensuring maximization of the benefits of power generation; to improve fuel management work and make every effort to ensure a safe, stable and effective fuel supply; to raise the key contract fulfillment rate, strengthen blending and mixed burning and effectively control fuel purchase costs; to strengthen the management of energy consumption indicators, actively promote refined management of energy consumption indicators and optimized operation of generating units and further raise the level of energy consumption indicators; to strengthen emissions reduction and continuously enhance the commissioning rate and overall efficiency of the environmental protection facilities; to actively cope with the severe financing environment and strive to explore financing channels in order to ensure capital sufficiency for the operation and development of the Company; to further optimize the debt structure and control financial risks; to actively push forward preliminary work of projects; to further optimize power structure and adjust deployment by making use of the "Twelfth Five-year Plan" of power development; and to strengthen infrastructure management and ensure the safe, stable and economical operation of new generating units in order to attain the requirements for energy saving and environmental friendly generating units.

About the Company

The Company is one of China's largest listed power producers with controlled generation capacity of 54,499 MW and equity-based generation capacity of 51,032.5MW. The power plants of the Company are located in 18 provinces, municipalities and autonomous regions in China. The Company also has a wholly-owned power company in Singapore.