RNS Number:0005P
Beijing Datang Power Generation Com
25 August 2003
Beijing Datang Power Generation Company Limited
(A Sino-foreign Joint Stock Limited Company incorporated in the People's Republic of China)
Announcement of 2003 Interim Results
I. INTERIM RESULTS
The board of directors (the "Board") of Beijing Datang Power Generation Company Limited (the "Company") hereby
announces the unaudited operating results of the Company and its subsidiaries for the six months ended 30th June
2003 (the "Period") prepared in conformity with International Financial Report Standards. Such results have been
reviewed and confirmed by the Audit Committee of the Company.
The Company's consolidated operating revenue for the Period amounted to approximately Rmb4,501,679,000, an
increase of 28.93% as compared to the corresponding period last year. Consolidated net profit was approximately
Rmb784,233,000, an increase of 30.42% as compared to the corresponding period last year. Earnings per share
amounted to approximately Rmb0.15, an increase of approximately Rmb0.03 per share as compared to the
corresponding period last year.
The Board is satisfied with the above results. Please refer to the unaudited condensed consolidated income
statement set out below for details of the operating results.
CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited)
FOR THE SIX MONTHS ENDED 30TH JUNE 2003
(Amounts expressed in thousands of Rmb, except per share data)
Six months ended 30th June
Note 2003 2002
Operating revenue 2 4,501,679 3,491,543
Operating costs 6 (3,129,463 ) (2,473,133 )
Operating profit 1,372,216 1,018,410
Share of profit of associates 7,223 3,718
Interest income 24,503 48,153
Finance costs 6 (233,700 ) (236,584 )
Profit before taxation 1,170,242 833,697
Taxation 3 (390,427 ) (277,565 )
Profit before minority interests 779,815 556,132
Minority interests 4,418 45,186
Net profit 784,233 601,318
Earnings per share - basic (Rmb) 4 0.15 0.12
1. Principal accounting policies
The condensed consolidated financial statements are prepared in accordance with International Accounting
Standard No. 34 Interim Financial Reporting and Appendix 16 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited.
The principal accounting policies adopted for the preparation of the condensed consolidated financial
statements for the six months ended 30th June 2003 are consistent with those adopted for the preparation
of the consolidated financial statements for the year ended 31st December 2002.
2. Operating revenue
Operating revenue represents amount of tariffs billed for electricity generated and transmitted to North
China Power Group Company ("NCPGC"). Operating revenue is billed and recognised upon transmission of
electricity to the power grid controlled and owned by NCPGC.
3. Taxation
Six months ended 30th June
2003 2002
'000 '000
PRC enterprise income tax
- Current tax 428,552 339,918
- Deferred tax (38,125 ) (62,353 )
390,427 277,565
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%.
4. Earnings per share
The calculation of basic earnings per share for the six months ended 30th June 2003 was based on net
profit of approximately Rmb784,233,000 (2002 - Rmb601,318,000) and on the weighted average number of
5,162,849,000 shares outstanding during the period.
No diluted earnings per share have been presented, as there were no dilutive potential ordinary shares
outstanding for the six months ended 30th June 2003 and 2002.
5. Profit appropriations
Dividends
On 3rd March 2003, the Board of Directors proposed a dividend of Rmb0.12 per share, totalling
approximately Rmb619,542,000 for the year ended 31st December 2002. The proposed dividend distribution
was approved by the shareholders in their general meeting dated 10th July 2003.
Reserves
Approximately Rmb16,180,000 has been transferred from the restricted reserve, which is specifically set
up to reflect the reduction of the statutory public welfare fund under PRC GAAP, to retained earnings.
This amount represented amortisation of deferred housing benefits for the six months ended 30th June
2003.
Pursuant to the Accounting System for Business Enterprises of the PRC, statutory public welfare fund is
transferred out to discretionary surplus reserve upon utilisation for the collective benefits of the
employees. For the six months ended 30th June 2003, approximately Rmb16,673,000 (2002 - Nil) of the
statutory public welfare fund was transferred out to discretionary surplus reserve.
6. Supplemental financial information
Six months ended 30th June
2003 2002
'000 '000
Interest expenses 254,991 243,108
Less: amount capitalised in property, plant
and equipment (85,416 ) (103,756 )
169,575 139,352
Exchange loss, net 13 -
Fair value loss on an interest rate swap 64,112 97,232
Finance costs 233,700 236,584
Cost of inventories
- Fuel 1,524,410 1,094,233
- Spare parts and consumable supplies 22,112 22,723
Depreciation and amortisation 716,794 666,358
Dividend income (10,063 ) (7,107 )
II. MANAGEMENT DISCUSSION AND ANALYSIS
The People's Republic of China (the "PRC") recorded a GDP growth rate of 8.2% during the Period. Driven by
domestic economic growth, power demand increased substantially, and aggregate social power consumption
increased by 15.43% as compared to the corresponding period last year. Power generation by the Company and
its subsidiaries during the Period increased by 29.87% as compared to the corresponding period last year,
while consolidated operating revenue increased by 28.93% as compared to the corresponding period last year.
In summary, consolidated net profit of the Company and its subsidiaries increased by 30.42%, or approximately
Rmb182,915,000, as compared to the corresponding period last year.
1. Operating Conditions
During the Period, the Company and its subsidiaries' operating installed capacity was 6,770MW and total
power generation amounted to 18,241,529MWh, representing an increase of 29.87% as compared to the
corresponding period last year. On-grid power generation during the Period amounted to 17,114,600MWh,
representing an increase of 30.97% as compared to the corresponding period last year. The increase in
power generation and on-grid power generation was mainly attributable to: (1) the increase of installed
capacity, owing to the addition of Unit 2 (600MW) of Tianjin Datang Panshan Power Generation Company
Limited ("Datang Panshan Power") which commenced commercial operation in July 2002, and Unit 1 (600MW) of
Inner Mongolia Datang Tuoketuo Power Generation Company Limited ("Datang Tuoketuo Power") which commenced
power generation in June 2003; (2) the rising power demand in the Beijing-Tianjin-Tangshan ("BTT") area,
marked by a 15.5% increase in power sold during the Period; and (3) safe and stable operation of existing
units at high operating levels, as reflected by an equivalent availability factor of 92.15% for the
Period.
2. Business Expansion
The Company continued to implement a pro-active expansion strategy while enhancing management of
construction in progress ("CIP") and preparatory works. The current status of CIP and preliminary works
in which the Company owns controlling stakes is as follows:
* Unit 1 of Datang Tuoketuo Power Phase I (600MW) commenced power generation in June 2003.
* Unit 2 of Datang Tuoketuo Power Phase I (600MW) commenced power generation in July 2003.
* The two units of Shanxi Datang Pingwang Thermal Power Company Limited (2X220MW) are expected to
commence power generation in the second half of 2003.
* Datang Tuoketuo Power Phase II (2X600MW) are expected to commence power generation in 2004.
* The first unit of Shanxi Datang Shentou Power Generation Limited (2X500MW) is expected to commence
power generation in 2004.
* Technological upgrade work of Hebei Datang Tangshan Thermal Power Company Limited Phase I and II
(2X300MW) is expected to commence power generation in 2004.
* The two units of Gansu Datang Liancheng Power Generation (2X300MW) is expected to commence power
generation in 2004.
* The first unit of Yunnan Datang Nalan Hydropower Development Company Limited (3X50MW hydropower
units) is expected to commence power generation in 2005.
Datang Tuoketuo Power Phase I is an integral part of the "West-to-East Power Transmission Plan". It
transmits electricity directly to the BTT area power grid, and will play a pivotal role in securing a
steady supply of power to Beijing.
3. Financial Analysis
(1) Operating Results
During the Period, the Company and its subsidiaries recorded consolidated operating revenue of
approximately Rmb4,501,679,000, consolidated net profit of approximately Rmb784,233,000 and earnings
per share of Rmb0.15.
During the Period, growth in both consolidated operating revenue and consolidated net profit was
attributed to the following reasons: the on-grid power generation of the four power plants
wholly-owned by the Company (with installed capacity of 4,950 MW) increased 13.19% as compared to
the corresponding period last year, thereby sustaining a relatively high level of profit. The smooth
running of Datang Panshan Power Units 1 and 2 and the two hydropower units of Hebei Huaze Hydropower
Development Company Limited has led to continued growth in consolidated profit of the Company and
its subsidiaries. Our consistent and stringent control over costs was effective to the extent that
growth in consolidated operating revenue of the Company and its subsidiaries out-performed the
increase in consolidated operating costs. Owing to the factors mentioned above, the consolidated net
profit of the Company and its subsidiaries increased by approximately 30.42%, or approximately
Rmb182,915,000, as compared to the corresponding period last year.
(2) Financial Conditions
As at 30th June 2003, total assets of the Company and its subsidiaries amounted to approximately
Rmb28,680,743,000, representing an increase of approximately Rmb1,861,055,000 as compared to that as
at 31st December 2002. Total liabilities amounted to approximately Rmb13,123,757,000, representing
an increase of Rmb1,590,582,000 as compared to that as at 31st December 2002. Minority interests
amounted to Rmb1,013,016,000, representing an increase of Rmb105,782,000 as compared to that as at
31st December 2002. Shareholders' equity amounted to approximately Rmb14,543,970,000, representing
an increase of Rmb164,691,000 as compared to that as at 31st December 2002. The growth in the
Company's total assets mainly reflected the implementation of the Company's development strategy and
the increase in investments in CIP by the Company.
(3) Liquidity
As at 30th June 2003, the Company's asset-to-liability ratio (i.e. the ratio between total assets
and total liabilities, excluding minority interests) was 45.76%. The net debt-to-equity ratio (i.e.
(total debt - cash and cash equivalents - short-term bank deposits (over 3 months) - investments
held for trading)/shareholders' equity) was 40.62%.
(4) Cash
As at 30th June 2003, the Company and its subsidiaries had total cash and cash equivalents and
short-term bank deposits (over 3 months) amounting to approximately Rmb4,228,207,000, among which
the equivalent of approximately Rmb786,833,000 of deposits was held in foreign currencies. The
Company had no trust deposits or overdue fixed deposit during the Period.
(5) Borrowings
As at 30th June 2003, the Company and its subsidiaries had short-term loans of approximately
Rmb1,780,450,000 at annual interest rates of 4.54% to 4.79%. Long-term loans (excluding those
payable within 1 year) amounted to approximately Rmb7,848,948,000 and long-term loans payable within
1 year amounted to approximately Rmb607,124,000 at annual interest rates of 2.53% to 5.76%,
including US Dollar loans equivalent to approximately Rmb2,407,512,000.
As at 30th June 2003, NCPGC and certain minority shareholders of the Company's subsidiaries provided
guarantees to the loan of the Company and its subsidiaries amounting to approximately Rmb4,972
million. The Company did not provide any form of guarantee for any company other than its
subsidiaries.
4. Future Prospects
The PRC government has laid down an objective to build a moderately affluent society. The adoption
of effective economic policies supported by pro-active fiscal and sound monetary policies, and
flexible economic leveraged realignments not only bolstered the existing economic growth, but also
laid a solid foundation for the future long-term development of the PRC. PRC will continue to
maintain its tremendous growth trend with the implementation of strategies like "Development of the
West" and "West-to-East Power Transmission Plan". Although the business expansion of the Company
will be greatly benefited by the sustained growth of the domestic economy, its operating results
will be affected by the impact of surging fuel prices and profitability of newly operating units.
Taking into account the prevailing market conditions, the Company will adhere to the business
objectives formulated by the Board early this year. The Company will continue to focus on both
expansion within and beyond our service area; our dual emphasis on hydropower and coal-fired power;
and dual strategy of building and acquiring power plants. The Company will strive to pursue greater
cost efficiency through growth, and growth through greater cost efficiency. It is also our objective
to bolster competitiveness through new management methods, system reforms and technological
innovation.
III. SHARE CAPITAL AND DIVIDENDS
1 Share Capital
No new shares were issued by the Company during the Period. As at 30th June 2003, the total share capital
of the Company amounted to Rmb5,162,849,000, divided into 5,162,849,000 shares with a nominal value of
Rmb1.00 each.
2 Substantial Shareholders
During the Period, the following persons (other than a director, chief executive or supervisor of the
Company) have interests or short positions in the shares or underlying shares as recorded in the register
required to be kept by the Company pursuant to section 336 of the Securities and Futures Ordinance
(Chapter 571) ("SFO"):
Percentage of
Class of Number of shares capital
Name of shareholder shares shares held (%)
China Datang Corporation/ Domestic Shares* 1,828,768,200 35.43
North China Power Group
Company
Beijing International Power Domestic Shares* 671,792,400 13.01
Development and Investment
Company
Hebei Construction Investment Domestic Shares* 671,792,400 13.01
Company
Tianjin Jinneng Investment Domestic Shares* 559,827,000
Company
* Shareholder's own interest in the long position
3 Dividends
Pursuant to a resolution at the Board meeting on 3rd March 2003 and as approved at the annual general
meeting held on 10th July 2003, the Company declared a dividend of Rmb0.12 for year 2002 payable to the
shareholders of the Company whose names appear on the Company's register of members as at 1st June 2003.
Dividends to domestic shares shareholders were declared and paid in Rmb. Dividends to overseas shares
(the "H Shares") shareholders were declared in Rmb and paid in Hong Kong Dollars.
The Board does not recommend the payment of any interim dividend for 2003.
4 Shareholdings of Directors and Supervisors
At any time during the Period, none of the directors, supervisors, chief executives of the Company or
their associates held or were deemed to hold interests or short positions in the shares, underlying
shares or debenture of the Company or any of its associated corporations (as defined in the SFO), nor
were they granted the right to subscribe for or purchase any interests in shares or debentures of the
Company or any of its associated corporations.
IV. PURCHASE, SALE AND REDEMPTION OF THE COMPANY'S LISTED SECURITIES
During the Period, the Company had not purchased, sold or redeemed any of the its listed securities.
V. SIGNIFICANT MATTERS
1. At the 2002 annual general meeting held on 10th July 2003, the Board was granted the authority to issue
new shares in the Company not exceeding 20% of its share capital.
2. At the 2003 extraordinary general meeting, H class meeting and domestic class meeting held on 10th July
2003, it was resolved that the validity period of the special resolutions passed at the extraordinary
general meeting, H class meeting and domestic class meeting held on 10th May 2002 authorising the Board
to issue up to US$300,000,000 overseas convertible bonds be extended until 29th June 2004.
VI. CODE OF BEST PRACTICE
During the Period, the Company had complied with the Code of Best Practice set out in Appendix 14 of the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").
VII. THE AUDIT COMMITTEE
The Audit Committee, together with the management, has reviewed the accounting principles, accounting
standards and practices adopted by the Company, and has discussed the issues on internal controls. It has
also reviewed the unaudited condensed consolidated financial statements for the six months ended 30th June
2003.
By Order of the Board
Zhai Ruoyu
Chairman
Beijing, PRC, 22nd August 2003
The interim report of the Company for the six months ended 30th June 2003, containing all the information required by
paragraph 46(1) to 46(6) inclusive of Appendix 16 to the Listing Rules, will be published on the website of The Stock
Exchange of Hong Kong Limited (http://www.hkex.com.hk) within 21 days after publication of this announcement.
Please refer to the South China Morning Post for the published version of the Company's interim results announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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