RNS Number:2363I
Beijing Datang Power Generation Com
04 March 2003
BEIJING DATANG POWER GENERATION COMPANY LIMITED
Announcement of 2002 Annual Results
Operating and Financial Highlights
On-grid power generation amounted to 30,119,062MWh, representing an increase of
22.48% over 2001
Consolidated operating revenue amounted to approximately Rmb8,017,912,000,
representing an increase of 22.40% over 2001
Consolidated net profit amounted to approximately Rmb1,404,612,000, representing
a decrease of 2.33% compared to 2001
Earnings per share amounted to Rmb0.272, representing a decrease of Rmb0.006 per
share compared to 2001
I. Company Results
The Board of Directors of Beijing Datang Power Generation Company Limited (the
"Company") hereby announces the audited operating results of the Company and its
subsidiaries prepared in conformity with the International Financial Reporting
Standards for the year ended 31st December 2002 (the "Year"), together with the
operating results of the corresponding period in 2001 (the "Previous Year") for
comparison. Such operating results have been reviewed and confirmed by the
Company's Audit Committee.
Consolidated operating revenue of the Company and its subsidiaries for the Year
was approximately Rmb8,017,912,000, representing a 22.40% growth compared to the
Previous Year. Consolidated net profit (before the impact of interest swap) rose
approximately 4.4%, if added the impact of interest swap, consolidated net
profit amounted to approximately Rmb1,404,612,000, representing a decrease of
2.33% compared to the Previous Year. Earnings per share amounted to Rmb0.272,
representing a decrease of Rmb0.006 per share as compared to the Previous Year.
In view of the operating results, the Board of Directors has recommended a
dividend of Rmb0.12 per share for the Year.
Please refer to the audited consolidated income statement set out below for
details of the operating results.
CONSOLIDATED INCOME STATEMENT
For the year ended 31st December 2002
2002 2001
Note Rmb'000 Rmb'000
Operating revenue 2 8,017,912 6,550,620
Operating costs
Local government surcharges (102,012) (86,749)
Fuel (2,556,173) (1,954,115)
Repair and maintenance (278,085) (220,468)
Depreciation (1,382,613) (1,071,866)
Wages and staff welfare (440,772) (364,163)
Others (820,699) (755,544)
Total operating costs (5,580,354) (4,452,905)
Operating profit 2,437,558 2,097,715
Share of profit of associates 5,499 3,913
Interest income 89,314 144,507
Finance costs 3 (522,145) (99,974)
Profit before taxation 2,010,226 2,146,161
Taxation 4 (672,156) (714,492)
Profit after taxation 1,338,070 1,431,669
Minority interests 66,542 6,391
Net profit 1,404,612 1,438,060
Proposed dividends 5 619,542 877,684
Earnings per share-basic (Rmb) 6 0.272 0.278
Proposed dividend per share (Rmb) 5 0.12 0.17
Notes:
1. Basis of presentation
The accompanying consolidated income statement is prepared in accordance with
International Financial Reporting Standards. The principal accounting policies
adopted for the preparation of the consolidated financial statements for the
Year are consistent with those adopted for the preparation of the financial
statements for the Previous Year.
2. Operating revenue
Operating revenue represents amount of tariffs billed for power generated and
transmitted to North China Power Group Company ("NCPGC"), the majority
shareholder. Tariff revenues are billed and recognised upon billing and
transmission of power to the power grid controlled and owned by NCPGC.
3. Finance costs
2002 2001
Rmb'000 Rmb'000
Interest expenses 282,478 99,420
Exchange (gain)/loss, net (557) 554
Fair value loss on interest
rate swap (note a) 240,224 ---
522,145 99,974
(a) To hedge against its interest rate risk in long-term loans in the long
run, Inner Mongolia Datang Tuoketuo Power Generation Company Limited ("Datang
Tuoketuo Power"), a subsidiary of the Company, has entered into an interest rate
swap which is carried at fair value. However, the swap do not meet the
requirements of the hedge accounting under International Accounting Standard 39.
The change of its fair value is charged to income statement.
4. Taxation
Enterprise income tax is provided on the basis of the statutory profit for
financial reporting purposes, adjusted for income and expense items which are
not assessable or deductible for income tax purposes. The applicable PRC
enterprise income tax rate for the Company and its subsidiaries is 33%.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Currently enacted tax
rates are used in the determination of deferred income tax.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be
utilised.
5. Profit appropriation
Dividends
On 3rd March 2003, the Board of Directors proposed dividends of Rmb0.12 per
share, totaling approximately Rmb619,542,000 for the Year. The proposed
dividends distribution is subject to the shareholders' approval in the general
meeting.
On 5th March 2002, the Board of Directors proposed dividends of Rmb0.17 per
share, totaling approximately Rmb877,684,000 for the Previous Year. The proposed
dividends distribution was approved by the shareholders in the general meeting
dated 23rd April 2002.
Surplus reserve and statutory public welfare fund
In accordance with the relevant laws and regulations of the PRC and the articles
of association, the Company and its subsidiaries are required to appropriate 10%
of its net profit determined based on the financial statements prepared in
accordance with the PRC accounting standards and regulations to each of the
statutory surplus reserve and statutory public welfare fund. Approximately
Rmb156,541,000 (2001 --- Rmb142,845,000) and Rmb156,541,000 (2001 ---
Rmb142,845,000) have been appropriated to statutory surplus reserve and
statutory public welfare fund respectively for the Year.
The appropriation of profit to the discretionary surplus reserve and its
utilisation are made in accordance with the recommendation of the Board of
Directors and is subject to shareholders' approval at their general meeting.
Appropriation of profit of approximately Rmb509,077,000 (2001 ---
Rmb258,331,000) to the discretionary surplus reserve for the Year is subject to
shareholders' approval at the general meeting.
6. Earnings per share
The calculation of basic earnings per share for the Year was based on the
consolidated net profit of approximately Rmb1,404,612,000 (2001 ---
Rmb1,438,060,000) and on the number of 5,162,849,000 shares in issue during the
Year
No diluted earnings per share was presented as there were no dilutive potential
ordinary shares outstanding for the Year.
II. Management Discussion and Analysis
China achieved national GDP growth of 8% during the Year. The
Beijing-Tianjin-Hebei ("BTH") area, the major area served by the Company,
continued to outgrow the national average with a 10.28% GDP growth.
Driven by domestic economic growth, the nation's power generation posted a
strong growth of 11.7% over the Previous Year. During the Year, power generation
by the Company and its subsidiaries grew by 21.9% over the Previous Year, and
operating revenues grew by 22.40% over the Previous Year. Projects of the
Company and its subsidiaries with total capacity of 3,050MW were commenced
during the Year, laying firm foundations for the Company's continuous
development.
1. Operating Conditions
As at 31st December 2002, the Company and its subsidiaries owned units in
commercial operation of an installed capacity (managed capacity) of 6,170MW.
Total power generation of the Company and its subsidiaries for the Year amounted
to 32,277,932MWh, representing an 21.9% growth over the Previous Year. A total
of 30,119,062MWh of on-grid power was generated, representing a growth of 22.48%
over the Previous Year. The increase in power generation and on-grid power
generation was mainly attributable to (1) the continuous upsurge of power demand
in the Beijing-Tianjin-Tangshan ("BTT") Area, which grew by 10.74% for the Year;
(2) the expansion of the Company's power generation capacity. During the Year,
the two 600MW units at Tianjin Datang Panshan Power Generation Company Limited
("Tianjin Datang Panshan") commenced commercial operation, increasing the
installed capacity managed by the Company and its subsidiaries by 1,200MW over
the Previous Year; and (3) safe and stable operation of existing units with high
operating levels reflected by an equivalent availability factor of 94.12%.
2. Operational Management
The Company and its subsidiaries recognised consolidated operating revenues of
approximately Rmb8,017,912,000 during the Year, representing an increase of
22.40% over the Previous Year. Consolidated net profit amounted to approximately
Rmb1,404,612,000.
During the Year, the Company and its subsidiaries continued to exercise
stringent cost-control measures. The system of accountability for financial
targets were implemented conscientiously. Expenses in various areas were
effectively controlled. Measures to reduce energy consumption were upheld
despite adverse conditions resulting from the continuous rise in fuel prices.
Coal consumption rate for power generation was reduced by 2.03g/kWh when
compared with that of the Previous Year. Auxiliary power consumption rate
dropped 0.41% as compared to the Previous Year. As a result, the rise in unit
fuel cost was effectively controlled and was only increased by Rmb4.79/MWh when
compared to the Previous Year.
Moreover, the Company and its subsidiaries' stringent, effective engineering
quality management programme resulted in excellent operating conditions of Units
1-2 of Tianjin Datang Panshan since they have commenced operation and ensured
safe and stable power generation. In addition, the rigorous implementation of
tender systems and construction cost management resulted in substantial
reductions in construction costs, enabling the units to achieve profits in the
first year of operation.
3. Business Expansion
The construction projects of the Company and its subsidiaries progressed
smoothly during the Year. Two 600MW units (1,200MW in total) at Tianjin Datang
Panshan, a subsidiary of the Company, commenced commercial operation and
construction of five other projects started during the Year. Breakthroughs were
achieved in preliminary project works, ensuring continued growth in the
production capacity of the Company and its subsidiaries:
(1) Two 600MW units (1,200MW in total) at Tianjin Datang Panshan commenced
commercial operation, increasing the installed capacity under the Company and
its subsidiaries' management by 1,200MW and bringing a total installed capacity
of 6,170MW. The commercial operation of these two 600MW units played an
important role in ensuring sufficient power supply to the BTT power grid (which
covered Beijing, the nation's capital) in the peak summer season, while securing
continued growth in the power generation of the Company and its subsidiaries.
(2) The construction of two 600MW units at Datang Tuoketuo Power Phase I
project progressed smoothly. Unit 1 has completed stand-alone trial operation in
stages, while Unit 2 has completed the supply of power to in-house systems. The
two units are expected to commence on-grid power generation in 2003.
(3) The following projects developed and constructed by entities controlled
by the Company have commenced work during the Year, with a total capacity of
3,050MW to be put in place:
. The two 600MW units at Datang Tuoketuo Power Phase II project, with the
first unit expected to commence on-grid power generation in 2004.
. The two 500MW units at Shanxi Datang Shentou Power Generation Company
Limited, with the first unit expected to commence on-grid power generation in
2004.
. Hebei Datang Tangshan Thermal Power Company Limited, currently undergoing
Phase I technological upgrade works (1X300MW) which is expected to commence
on-grid power generation in 2004.
. The two 200MW units at Shanxi Datang Pingwang Thermal Power Company
Limited ("Datang Pingwang Thermal Power"), expected to commence on-grid power
generation in 2003.
. The development, construction and operation of the Yunnan Nalan Hydropower
Project (3X50MW hydropower units) by Yunnan Datang Nalan Hydropower Development
Company Limited with the first unit expected to commence on-grid power
generation in 2005.
(4) Preliminary project works for the following progressed smoothly:
. The feasibility study report for the installation of two 300MW units at
Gansu Datang Liancheng Power Generation Company Limited has been approved by the
State Planning and Development Commission ("SPDC").
. Project proposal for the Yayangshan Hydropower Project (3X33MW) under the
Lixianjiang Hydropower Development Project, a project developed, constructed and
operated by an entity controlled by the Company, has been approved by Yunnan
Provincial Planning and Development Commission.
. The feasibility study report for the installation of two 300MW units at
Yunnan Datang Honghe Power Generation Company Limited has been submitted to SPDC
for approval.
4. Financial Analysis
(1) Operating Results
Consolidated operating revenues of the Company and its subsidiaries amounted to
approximately Rmb8,017,912,000 during the Year. Consolidated net profit amounted
to Rmb1,404,612,000. Earnings per share amounted to Rmb0.272.
During the Year, the four wholly-owned power plants of the Company (with a total
operating capacity of 4,950MW) maintained high profit levels as a result of
increased power generation and the implementation of tariff adjustments of Units
5-8 at Zhang Jia Kou Power Plant. Units 1 and 2 of Tianjin Datang Panshan, which
commenced operation during the Year, maintained satisfactory operating
conditions and succeeded in attaining profit in their first year of operation.
Because of rising coal prices and the increase in depreciation and related
interest expenses of the new units of the Company and its subsidiaries, the
Company's unit cost for power generation recorded a year-on-year increase of
Rmb5.58/MWh. But as a result of effective cost control measures, consolidated
net profit (before the impact of interest swap) of the Company and its
subsidiaries rose approximately 4.4%. If added the impact on interest rate
difference and change in fair value of interest rate swap contract of Datang
Tuoketuo Power, a subsidiary of the Company, a 2.33% slight drop in consolidated
net profit of the Company and its subsidiaries compared to the Previous year was
resulted.
(2) Financial Position
As at 31st December 2002, total assets of the Company and its subsidiaries
amounted to approximately Rmb26,819,688,000, representing an increase of
approximately Rmb3,629,645,000 over the Previous Year. Total liabilities
amounted to approximately Rmb11,533,175,000, representing an increase of
approximately Rmb2,725,373,000 over the Previous Year. Minority interests
amounted to approximately Rmb907,234,000, representing an increase of
approximately Rmb377,344,000 over the Previous Year. Shareholders' equity
amounted to approximately Rmb14,379,279,000, representing an increase of
approximately Rmb526,928,000 over the Previous Year. The increase in total
assets mainly reflected the implementation of the Company and its subsidiaries'
expansion strategy and their increased investments in projects under
construction.
(3) Liquidity
As at 31st December 2002, the Company and its subsidiaries' asset-to-liability
ratio (i.e. the ratio between total liabilities and total assets, excluding
minority interests) was 43.00%. The net debt-to-equity ratio (i.e. (total debt
-- cash and cash equivalents -- bank deposits -- quoted securities)/
shareholders' equity) was 33.07%.
(i) Cash and bank deposits
As at 31st December 2002, the Company and its subsidiaries had total cash and
cash equivalents and bank deposits with a term of over 3 months amounting to
approximately Rmb4,226,614,000, among which the equivalent of approximately
Rmb2,089,296,000 was held as deposits in foreign currencies. The Company and its
subsidiaries had no trust deposits or overdue fixed deposits during the Year.
(ii) Borrowings
As at 31st December 2002, the Company and its subsidiaries had short-term loans
of approximately Rmb316,000,000 at annual interest rates ranging from 3.99% to
5.85%. Long-term loans (excluding those repayable within 1 year) amounted to
approximately Rmb8,125,089,000 and long-term loans repayable within 1 year
amounted to approximately Rmb540,953,000 at annual interest rates ranging from
2.88% to 6.21%, including USD loans equivalent to approximately
Rmb2,211,982,000.
As at 31st December 2002, the Company provided guarantee for loan facilities of
approximately Rmb3,389,000,000 granted to its subsidiaries.
5. Outlook for 2003
It is estimated that China will continue to achieve steady economic growth in
2003, which is favorable to the development of the power industry. Meanwhile,
the restructuring of China's power industry has also entered into the stage of
effective implementation, signaling a new era for industry players as well as
providing a positive backdrop for the Company's expansion. In view of these
developments, the Company shall continue to leverage on its strengths,
capitalising on opportunities that present themselves to constantly explore and
expand its operations at home and abroad. However, the Company's operations are
also facing quite a number of challenges, including pressure of surging costs as
fuel prices, water charges and raw material costs are generally on the rise.
Afterall, the formation of five power generation groups, now the basic framework
underlying the market-oriented transformation of the power industry, has laid
the foundation for the Company's nationwide development. The Company is
confident that with its strengths it will capitalise on every opportunity and
meet every challenge to fulfill its targets for 2003, so as to achieve improved
economic efficiency and to protect and enhance shareholder value.
The Company's work for 2003 will focus on the following aspects:
(1) Actively pursue business expansion and implement preliminary project
works to identify as well as create development opportunities;
(2) Actively investigate different financing channels that would help lower
the Company's capital costs and rationalise its capital structure, to prepare
ahead for fund requirements arising from the Company's expected rapid expansion;
(3) Endeavour on project construction work to ensure Units 1-2 of Datang
Tuoketuo Power Phase I (2X600MW) and Units 1--2 of Datang Pingwang Thermal Power
(2X200MW) commence operation in 2003;
(4) Improve the safety standards of all of the generating units by
facilitating maintenance programmes, improving quality of repairs, enhancing
operation of equipment and eliminating defects and hazards that might affect the
safe and stable operation of the units; and
(5) Explore new sources for revenues and opportunities for cost savings and
achieve revenue growth by increasing power generation, obtaining higher tariffs
and optimising on-grid power structures.
III. Share Capital and Dividends
(1) Share Capital
No new shares were issued by the Company during the Year. As at 31st December
2002, the total share capital of the Company was Rmb5,162,849,000, divided into
5,162,849,000 shares of Rmb1.00 each.
(2) Substantial Shareholders
As at 31st December 2002, substantial shareholders holding more than 10% of the
shares of the Company were as follows:
1 Number Percentage of
Name of shareholder Class of shares of shares share capital (%)
North China Power Domestic Shares 1,828,768,200 35.43
Group Company
Beijing International Power Domestic Shares 671,792,400 13.01
Development and Investment Company
Hebei Construction Domestic Shares 671,792,400 13.01
Investment Company
Tianjin Jinneng Domestic Shares 559,827,000 10.84
Investment Company
(3) Dividends
The Board of Directors has declared dividends for the Year of Rmb0.12 per share.
Dividends to be distributed to domestic shareholders will be declared and paid
in Rmb, while those to be distributed to foreign shareholders will be declared
in Rmb but paid in Hong Kong Dollar. Hong Kong Dollar exchange rate for the
purpose of dividends payment shall be based on the average of the closing rates
of the Hong Kong Dollar/Rmb exchange rates quoted by the People's Bank of China
on each business day within the week immediately prior to payment. The dividends
will be distributed on 30th June 2003.
(4) Shareholdings of Directors and Supervisors
During the year, none of the directors, supervisors or their spouses and
children under 18 years of age held or effectively owned any share or debt
equity of the Company or any of its associated corporations (as defined in
Securities (Disclosure of Interests) Ordinance), nor were they granted any
rights to subscribe for or acquire any share or debt equity of the Company or
any of its associated corporations.
IV. Other Matters
Employees' Medical Insurance
Local governments at where the Company and its subsidiaries are situated have
promulgated implementation rules on staff medical insurance. In accordance with
such staff medical insurance implementation rules, the Company and its
subsidiaries are required to pay on behalf of employees basic medical insurance
fees, mutual medical fund and supplementary corporate medical insurance
calculated as certain percentages of employees' wages. The specific schedule for
the Company and its subsidiaries' participation in such insurance plans shall be
determined by the local governments. Pursuant to arrangements of local
governments, the Company and its major subsidiaries had either been notified
that they were not required to join any medical insurance plans for the time
being or had not received any notice to join such plans as at the end of the
Year.
The Company and its subsidiaries anticipate that observing such medical
insurance rules shall not have any significant impact on the Company and its
subsidiaries.
V. Purchase, Sale and Redemption of the Company's Listed Securities
During the Year, the Company has not purchased, sold or redeemed any of its
listed securities.
VI. Code of Best Practice
During the Year, the Company has complied with the Code of Best Practice set out
in Appendix 14 of the Listing Rules of The Stock Exchange of Hong Kong Limited.
By Order of the Board
Zhai Ruoyu
Chairman
Beijing, the People's Republic of China, 3rd March 2003
The 2002 annual report of the Company containing all the information required by
paragraphs 45(1) to 45(3) of Appendix 16 of the Listing Rules will be published
on The Stock Exchange of Hong Kong Limited's website in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
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