Interim Results 2011Interim Results 201129th August 201129th August 2011
Hong KongHong Kong
Results Summary in 1H
Business Performance by Sector in 1H
Market and Policy Review in 1H
Operation Outlook in 2H
The Corporate 12th Five-Year Plan
1H 2011 Results Highlights – Operating Data
3
34252.837258.4
2010-06-30 2011-06-30
90.661
76.013
1H 2010 1H 2011
5.805.95
1H 2010 1H 2011
324.92
319.67
1H 2010 1H 2011
2304
2557
1H 2010 1H 2011
94.17
91.46
1H 2010 1H 2011
Installed Capacity
Utilization Hours
Gross Generation
Unit Coal Consumption Rate
Internal UsageEquivalent Availability Factor
(MW)
(%)(%)
(g/KWh)(Hours)
(Billion KWh)
8.8%
253
2.71
19.3%
5.25
0.15
Source: Corporate Interim Results 2011
1H 2011 Results Highlights – Financial Data
4Note: Basic earnings per share has been taken into account the impact of A-share non-public offering in May.
289.5
333.2
1H 2010 1H 2011
9.12 9.32
1H 2010 1H 2011
384
309
2010-12-31 2011-06-30
81.95 80.5
2010-12-31 2011-06-30
0.0757 0.0747
1H 2010 1H 2011
2129
2374
2010-12-31 2011-06-30
Operating Revenue
Basic Earnings Per Share
Net Profit
Debt to Asset Ratio
Shareholder’s EquityTotal Assets
(100 million RMB)
( 100 million RMB)( 100 million RMB)
(%)(RMB/Share)
(100 million RMB)
15.1%
0.001
11.5%
2.2%
1.45
24.5%
Source: Corporate Interim Results 2011
0.76%
63.61%13.17%
3.22%
3.05%
7.36%10.47%
0.61%
56.66%
14.43%
3.40%
3.65%
10.90%
10.35%
Cost Structure and Change Analysis
Company Cost Breakdown YoY Changes (Calculated in cost per unit generation)
Source: Corporate Interim Results 2011 5
Cost Breakdown in 1H 2010
Cost Breakdown in 1H 2011
33.89%
16.33%
-2.25%
1.51%
-10.50%
8.27%
-25.04%-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Local Government Surcharges Fuel Cost
Depreciation Repair and Maintenance
Labor Cost Others and S,G&A
Financial Expense
Results Summary in 1H
Business Performance by Sector in 1H
Market and Policy Review in 1H
Operation Outlook in 2H
The Corporate 12th Five-Year Plan
2.0%11.2%
86.8%
Power Business: Capacity Grew and Structure Optimized
7
▼In 1H, the Company has 1208.1MW new capacity coming on stream and the generation capacity has been raised successively. In the meantime, the capacity structure has been further optimized by higher proportion of new energy.
24957.4
36300.3
25755.1
37258.4
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Equity Attributable (MW) Under Management (MW)
By 30 June 2011 By 31 December 2010
Capacity Growth in 1H 2011
2.6%
3.2%
Capacity Structure (by 30 June 2011)
1.2%10.6%
88.2%
Thermal Power Hydro Power Wind Power
Capacity Structure (by 31 December 2010)
Source: Corporate Data and Information
Power Business: Power Generation Increased Steadily
8
961.57
807.68
1H 2010 1H 2011
Gross Generation(100 million KWH)
19.1%
899.87
762.6
1H 2010 1H 2011
Thermal Power Generation(100 million KWH)
18%
55.14
41.06
1H 2010 1H 2011
Hydro Power Generation(100 million KWH)
34.3%9.33
3.99
1H 2010 1H 2011
Wind Power Generation(100 million KWH)
134.5%
Source: Corporate Data and Information
Power Business: Utilization Further Raised
9
2306
2557
National Average Datang Power
Corporate Average Utilization Hour Thermal Units Average Utilization Hour
▼In 1H, the Company has achieved average utilization of 2557 hours, with a yoy increase of 253 hours.
Compared with
National Average
Compared with 1H
2010
251
2304
2557
1H 2010 1H 2011
253
25922750
National Average Datang Power
158
2504
2750
1H 2010 1H 2011
246
Source: Corporate Data and Information
Power Business: New Energy Project Contribution Raised Greatly
10
1676
6299
1H 2010 1H 2011
-4101
1242
1H 2010 1H 2011
157441
89681
1H 2010 1H 2011
EBT From Thermal Power ( 10 thousand RMB)
EBT From Hydro Power ( 10 thousand RMB)
43%276%
130%
▼Thermal power business still plays as the major contributor of profit. However, due to the hiking coal price, its profitability has been lowered.
▼The contribution of new energy like hydro and wind power have been raised remarkably.
Source: Corporate Data and Information
EBT From Wind Power( 10 thousand RMB)
To strengthen the security management of operational nuclear facilities. All the units of nuclear facilities need to strictly abide by the operational guidance and strengthen operational management. The regulating authorities need to strengthen inspection and guide the enterprises to find and eliminate those potential dangers.
To strictly approve the new applied nuclear power projects. To promote the nuclear security plan and adjust the mid-to-long term nuclear development plan. Before the nuclear security plan approved, pause the approvals of nuclear power projects including those under planning.
Security Inspection
Security Management
of Operational Facilities
Inspection on Projects under Construction
Strictly Approve New
Projects
The Policy Announced by the State Council of
China after Nuclear Accident in Japan
To organize complete security inspection on the nuclear facilities within our territory right way. Through delicate security assessment, to take measures to smooth away any security loopholes so as to guarantee absolute security.
To inspect the nuclear projects under construction. To make the security evaluation on all the nuclear power projects under construction with the most advanced standard. To those projects not reaching the standard, it must be stopped from construction.
The inspection on Ningde Nuclear Power Project has been finished and there is no impact to the commencement time and investment budget.
The Progress of Datang’s Nuclear Power Projects
There is a little bit impact to the construction schedule of Liaoning Xudapu Nuclear Power Project because the technology need to be re-determined by the government.
11
Power Business: Nuclear Projects Progressed Smoothly
Source: Corporate Information
12
Sichuan Huangjinping Hydro Power (850MW
Hebei Wanshengyong
Wind Power (150MW)
Inner Mongolia Shengli Coal Mine (20million tons/year)Ⅱ Liaoning Faku Wind
Power (48MW)Ⅲ
Sichuan Huangjinping Hydro Power (850MW)
Ningxia Qingtongxia Wind Power Ⅰ (48MW)
▼In 1H, the company has five power projects with total capacity of 1116MW approved by the government, as well as one coal project with capacity of 20million tons per year.
Hydro-power Wind Power Solar Power Coal Mine
Source: Corporate Data and Information
Ningxia Qingtongxia Solar Power (20MW)Ⅱ
Power Business: Projects Acquired Approvals
Power Business: Energy Saving & Emission Cuts Achieved
▼In 1H, the Company has strengthened its environmental protection management. The emission indicators of major pollutants had been further improved and now perform far better than the industry’s average standards.
0.63
0.31 0.2870.215
0.147 0.126 0.118
0
0.2
0.4
0.6
0.8
1
1.2
2005 2006 2007 2008 2009 2010 1H2011
3.30
2.78 2.61
2.06
1.541 1.396 1.329
0
1
2
3
4
2005 2006 2007 2008 2009 2010 1H2011
6.14
4.69
2.79
1.0350.444 0.42 0.382
0
1
2
3
4
5
6
7
2005 2006 2007 2008 2009 2010 1H2011
344
241206 202
133
75 65.91
0
100
200
300
400
2005 2006 2007 2008 2009 2010 1H2011
350.62343.30
336.33331.4
326.51 323.59319.67
300
310
320
330
340
350
360
370
2005 2006 2007 2008 2009 2010 1H2011
13Source: Corporate Data and Information
Unit SO2 Emission (g/KWh)
Unit NOX Emission (g/KWh)
Unit Ash Emission (g/KWh)
Unit Waste Water Emission (g/KWh)
Unit Coal Consumption (g/KWh)
14
The Company’s Coal Production in Recent YearsThe Company’s Coal Production in Recent Years
Coal Mine Raw Coal Production(10thousand tons)
2008 2009 2010 1H 2011
Yuzhou 500 645 690 358
Tashan 1000 1700 2020 1140
Shengli 300 300 1000 435
Baoli -- -- 118 62
Total 1800 2645 3828 1995
▼In 1H, the Company’s four coal mines have produced about 20million tons of raw coal. Besides, the profit from coal mines also increased. e.g. the investment benefit in 1H from Tashan and Yuzhou Coal Mines were RMB 221million and RMB 45million separately.
Coal & Transport Business: Coal output and Earnings Increased
Source: Corporate Data and Information
15
RailwayThe company was prepared to invest to construct the Huzhun’e Railway(249km);By the end of June 2011, the company has invested to operate and construct railway which are over 4000km long
The company has invested to construct the port in Huludao, Liaoning Province;The company has locked up 20million tons of coal turnover in four important coal ports in North China
The four 45000 DWT vessels of Jiangsu Datang Shipping Company were put into commercial operation in 1H;By 30th June, the company’s total shipping capacity has reached 400000 DWT and the whole year shipping volume is expected to reach 7million DWT
Coal & Transport Business: Transport Projects in Progress
Source: Corporate Data and Information
Port
Shipping
16
2# & 3# Gasifier and MTP Facilities
Technique Renovation and repair
Output Qualified Methanol
February - July
January
End of June
At Current
Integrated TrialOperation
Produce Qualified PP and Keep Stable Operation
The Updated Progress of Duolun Project
Coal-Chemical Business: The Updated Progress of Duolun Project
Source: Corporate Data and Information
Beforethe end of 2011
2. From February to July, the company made complete
technique renovation and repairs to the flaws appeared in
the proliferation period and laid firm foundation for the
whole process trial operation;
1. In January 2011, the 2# & 3# gasifiers and the MTP
facilities have successfully passed through trial
operation;
3. By the end of June, the qualified methanol (99% purity)
has been produced and all the working section has been
broken through individually;
4. Currently, the facilities are in process to be put into
integrated trial operation;
5. Before the end of 2011, qualified end product PP
will be produced and the facilities will achieve
stable operation.
17
Keqi Coal to Gas ProjectThe process of gasification, air separation, purification,
methanation, polluted water purification, etc. have been
constructed and installed according to schedule;The water pipeline from Dashimen Reservoir to Keqi
Project has been finalized;By the end of June, 297.63km of the gas pipeline with total
length of 316km has been finished.
Fuxin Coal to Gas Project
The main facilities like gasification, air separation, low
temperature methanol wash, thermal power island have
started construction since May;The concreting of the units in air separation section has
been finalized;The railway has been in construction according to schedule.
Coal-chemical Business: The Updated Progress of Coal-gas Projects
Source: Corporate Data and Information
Results Summary in 1H
Business Performance by Sector in 1H
Market and Policy Review in 1H
Operation Outlook in 2H
The Corporate 12th Five-Year Plan
8.82%
15.82%
13.41%
11.23%10.79%
13%
11.81%
January February March April May June July
2011 National Power Consumpation YOY Growth Rate(%)
National power demand remain strong. In 1H, the national power demand reached 2251.5 billion KWh, with yoy growth of 12.2%.
In 1H, power shortage took place in East, North and Central China and the impact is becoming spreading out, earlier and severe.
19
The power demand in major heavy industries like metallurgical, construction material and chemicals grew fast with total power consumed of 748.2billion KWh in 1H, adding 3.8pt in power demand growth.
Strong Power Demand & Worsening Power Shortage
Source: China Electricity Council
▼Entering into the 12th Five-Year Plan period, the industrialization and urbanization of our country will be promoted and heavy industries will remain in high proportion in national economy. Therefore, the power supply shortage is expected to be further enlarged.
Coal Price Continued Hiking
Coal Supply and Demand and Price Trend The Company’s Contract Coal Fulfillment
In 1Q, the coal price was stable at high level. While since the late March, the spot coal price started to hike and kept hiking for 14 weeks.In 1H, the coal inventory of power plants were normal in general. However, due to coal price, transport and supply issues, the coal supply became a problem in certain region periodically.
.
In 1H, the company has 17.78million tons of contract coal delivered, with the delivery ratio of 88%,which is about 6 percent higher than 1H 2010. The average standardized contract coal price was 533.62RMB/ton, rising 5.2% yoy basis.
20Source: www.China5e.com , The Company data and information
Tariff Adjustment in Favor of the IPPs
21
Recent On-grid Tariff Adjustment (Fen/KWh)
Main Reasons for on-grid Tariff Increase:
▼The country has raised the thermal power on-grid tariff in certain
provinces separately since 1st January 2010, 10th April 2011 and 1st
June 2011;
▼The commencement of new units in 2H 2010 in provinces like
Jiangsu and Guangdong with higher on-grid tariff has driven up the
company’s average on-grid tariff
368.04390.84
1H 2010 1H 2011
6.2%
Corporate Average On-grid Tariff (RMB/MWh)
Source: The Company Data and Information, Corporate Announcement
Results Summary in 1H
Business Performance by Sector in 1H
Market and Policy Review in 1H
Operation Outlook in 2H
The Corporate 12th Five-Year Plan
General Power Shortage
Thermal Utilization Enjoys High Growth
It is expected the national average utilization hours in 2011 will reach 4650; the utilization hour of thermal units will reach 5250, about 200 hours higher than that of 2010.
It is expected the national peak load in this summer will increase 14% and the capacity shortage will total around 30-40GW in North China , East China, Central China and Southern Grid. While, in Northeast, Northwest and West Inner Mongolia Grid, there is 20GW surplus in capacity. It is expected the national capacity shortage will be around 25-30GW in the winter peak season.
In 2H, the power demand will remain high growth. Affected by the uneven location of new added capacity, imbalanced construction of power plant versus power grid, less new added thermal power capacity, the general power supply compared to demand will be in shortage.
1. Well done in market analysis and forecast and coordinate alternative power generation plan;
2. Well organize the production of hydro and wind power projects to avoid water and wind rejection;
3. Keep on coordination with the grid company after Huhhot Thermal Power Plant return as internal power plant;
4. Try hard to lower the internal electricity usage ratio.
Power Demand Will Maintain Strong Growth
23Source: China Electricity Council, The Company’s Data and Information
Power Supply Trends in Shortage in 2HPower Supply Trends in Shortage in 2H
Measures to raise Electricity Generations in 2HMeasures to raise Electricity Generations in 2H
Structural Power Shortage
Structural Power Shortage
Coal Coal
PricePrice
In 4Q, the coal price will rebound
Since the 2H, the coal price has been dropping for over 5 weeks
In 2H, the BSPI average price
has experienced slight
dropping over 5 weeks. It is
expected to continue till the
end of September without
contingent occurrence.
In 4Q, the North part of China will
step into heating season, and the
inelastic coal demand will drive
the spot coal price up. However,
the coal price hike will not be
remarkable and unlikely be over
the high rate in June.
Focusing on Fuel Cost ControlTo fulfill whole process fuel management and optimize the fuel structurePromote coal blending and increase import coalLower fuel cost by managing the time lag between coal procurement and storageStrengthen coal delivery by active communications between coal mines and railwayTry to raise the thermal coal contract fulfillment ratio
24
Coal Price will drop followed by rising in 2H
Source: China Electricity Council, www.china5e.com
Main Factors affecting the Earnings in 2H
25
In 2H, the coal price will maintain at high level with high probability of further hiking and this will impact the profitability of coal-fired power plants.
Coal Price
Tariff
Interest Rate
Fuel cost-tariff pass through mechanism is still the best way to ease the conflicts between coal price liberalization and tariff regulation. The China Electricity Council suggested the government to adjust the on-gird tariff timely.
To control the high inflation, there is still high possibility for the central bank to raise the interest rate in 2H. This will bring more pressure for the fund raising and financial expense control.
Factors
Source: The Company’s Information
Various Ways to tackle the Headaches of the IPPs
Reduce the income tax rate
for the IPPs
The government authorities help find more
ways to raise money
Increase the capital fund injection into the
IPPs
Raise the on-grid tariff at the right
time
26Source: China Electricity Council
The China Electricity Council suggested to use multiple ways to ease the difficulties
of the IPPs
Results Summary in 1H
Business Performance by Sector in 1H
Market and Policy Review in 1H
Operation Outlook in 2H
The Corporate 12th Five-Year Plan
The Guidelines for the Company’s 12th Five-Year Plan
2828
StrategyStrategy
Sticking on the company’s Development Strategies of focusing on the power generation business whilst deploying diversifications. Taking power business as core, coal business as fundamental, coal-chemical and metallurgical (integrated use of high-alumina fly ash) as new profit source, railway, port and shipping as bond to position each industry.
To develop a batch of sector basis with core competitiveness, good profitability, advanced technology, summarized innovation and diversified synergy in regions with resource advantage, market advantage or policy advantage so as to building up the company’s benefit and brand name.
To develop a batch of sector basis with core competitiveness, good profitability, advanced technology, summarized innovation and diversified synergy in regions with resource advantage, market advantage or policy advantage so as to building up the company’s benefit and brand name.
Continue to enhance coal-fired power; aggressively expand its hydropower; continuously develop wind power; strategically develop nuclear power; moderately develop solar energy; focus on suitable coal operations; aggressively and steadily develop coal-to-chemical projects; speedily develop the integrated use of high-alumina fly ash; and secure a complementary development of railway, port and shipping.
Continue to enhance coal-fired power; aggressively expand its hydropower; continuously develop wind power; strategically develop nuclear power; moderately develop solar energy; focus on suitable coal operations; aggressively and steadily develop coal-to-chemical projects; speedily develop the integrated use of high-alumina fly ash; and secure a complementary development of railway, port and shipping.
Source: The Company’s Information
SchemeScheme
ModeMode
The Strategic Devise of the Six Profit Basis
29
In the 12th five-year plan period, the company is focused on building six profit basis that can integrate the projects with synergistic effects as well as geographic interfaces.
福建
广东
山西
四川
云南
西藏 江苏
Western Inner Mongolia Coal-Electricity-Aluminum Profit Base
Western Inner Mongolia Coal-Electricity-Aluminum Profit Base
Eastern Inner Mongolia Energy Chemical Profit Base
Eastern Inner Mongolia Energy Chemical Profit Base
New Energy Profit Base
New Energy Profit Base
South East China Hydro
Power Profit Base
South East China Hydro
Power Profit Base
内蒙古 辽宁
河北北京
Southeast Coastal Coal-fire Power Profit Base
Southeast Coastal Coal-fire Power Profit Base
托克托
Pan-Bohai Power Profit Base
Pan-Bohai Power Profit Base
锡林浩特
Source: The Company’s Information
30
The Duolun project will break through its production process and step into stable production period
The Phase Ⅲ of Fuxin Coal-to-gas project will be put into commercial operation
Promote the Coal-chemical Projects to set up a Good Layout
Source: The Company’s Information
The Phase Ⅲ of Keqi and the Phase of Fuxin Coal-to-gas Ⅱprojects will be put into commercial operation
The Duolun project will reach its full load; the Phase of Keqi Ⅱand the Phase of Fuxin Coal-to-gas projectsⅠ will be put into commercial operation
The Duolun project will raise its load factor; the Phase of ⅠKeqi Coal-to-gas project will be put into commercial operation
Thanks!
31