HK Electric profit hit by mild weather

Business | Samantha Wong 14 Mar 2018

Samantha Wong

HK Electric Investments (2638) posted a seven percent decrease in net profit from HK$3.590 billion in 2016 to HK$3.341 billion last year.

Unit sales of electricity decreased by 1.6 percent mainly due to much milder weather in the first half of 2017 and public awareness of energy conservation, the company said.

The board has declared a final distribution of 20.12 HK cents per share stapled units, bringing to a total distribution of 40.04 HK cents per unit for the year.

Over the following months, chairman Canning Fok Kin-ning said the group's key priority will be to complete deliberations with the government on items associated with the implementation of the new scheme of control agreement.

This includes the introduction of feed-in tariffs and renewable energy certificates, Fok said, adding that the group will prepare an upcoming five-year development plan for government's approval, and finalize any pending operational details.

In April last year, the Group entered into a new scheme of control agreement with the government for a term of 15 years, starting from next year.

HK Electric said the new agreement will help the group "make the significant investments required to meet the government's carbon reduction targets" and "satisfy the community's aspirations for cleaner air.""

The group is also developing an offshore liquefied natural gas terminal using floating storage and regasification unit technology with CLP Group (0002), to give additional access to natural gas transported by ship in liquid form, according to the company.

The environmental impact assessment report of the project will soon be submitted to the government for approval, it added.

HK Electric also said it will "make significant investments" to gradually replace its retiring coal-fired units with new gas-fired units to meet the government's carbon reduction targets and satisfy the community's aspirations for cleaner air.

As of the end of last year, the company's net debt-to-capital ratio stood at 44 percent, remained the same as 2016.

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