Earnings Call: Q1 2006

Apr 26, 2006

Earnings release

Good evening, ladies and gentlemen. Welcome to the telephone conference call hosted by Huaneng Power International. Firstly, I'd like to briefly review the company's operating results in the first quarter of 2006. Based on Chinese accounting standards, in the first three months of 2006, the company realized an operating revenue of CNY 10.108 billion, representing an increase of 8.49%. Profit attributable to shareholders was CNY 1.094 billion, representing an increase of 38.66%. The company's operating power plants in aggregate completed the total power generation of 37.096 billion kWh, representing an increase of 2.79% over the same period of last year. Unit fuel costs remained flat compared with that of last year. The company's board of directors is satisfied with the operating performance of the company in the first quarter of this year. [Foreign language] Looking ahead, the company is confident and committed to seize opportunities, overcome difficulties, and ensure the fulfillment of various targets with respect to operation and production and to bring sustained, stable and increasing returns to the shareholders. Now I like to be happy to answer the questions you may have. Thank you. Thank you, Mr. Huang. 谢谢黄总. Now it's time for questions. If you like to ask a question, please push one on your telephone pad and you may also push star and zero for operator assistance at any time. 我们现在欢迎大家提问，如果有提问的话，请大家在你的电话机上按 1 键。如果任何的时候需要电话公司的协助的话，请按星零。提问的话按 1. Operator, do we have any questions lining up? First question we have Mr. Philip Sin, Deutsche Bank in Hong Kong. Please go ahead. Philip, please. 大家好，管理层好，是德意志的冼伯昌。首先恭喜管理层这么好的业绩。我的问题就是，可能这个业绩非常令人意外的，就是单位燃料成本跟去年同期相比没有上涨，那么这个原因是什么？是否因为第一个季度华能跟煤炭供应商的谈判还没有解决，所以还是用那个去年的价格来做settlement，或者是那个合同煤的量的比例比去年同期多了，所以那个平均的煤炭价格跟去年差不多，虽然那个合同价格是有所提升。或者第三个原因也有可能就是那个原煤价格是涨了，但是那个煤质有所提高，所以以标煤来算，这个价格没有变化。是什么原因呢？谢谢。请周总快回答这个问题。有翻译。我也不知道。今年第一季度的单位燃料成本跟去年相比，基本上持平，上升了0.07%。主要的原因是由于煤价得到了控制。与去年同期相比较，煤价基本上持平。那么从煤炭供应的情况来看，我们到目前为止已经签订了重点合同的数量为5094万吨。那么一季度市场采购是763万吨，重点合同是850万吨，兑现率比较好，兑现率是71%。冼先生，Mr. Philip Sin，你有跟进的问题吗？可以了吗？那个煤质的质量跟热量有没有提高呢？煤质有所提高。好，有没有一个数据？有，大概是40克左右吧。忘记了，好像那次有说。大概提高40个大卡。 Philip, is it OK? [Foreign language] 好，那么就是想确认一下，就是第一季度所有燃料成本都是以06年谈完谈定的执行价格。谈定的价格来入账。对。好，谢谢。好，接下来的提问是由摩根士丹利的李先生。Simon Li from Morgan Stanley, please. 你好，管理层，我是李浩然，摩根士丹利。我有两个问题，第一个就是想跟进一下你们的上海燃气电厂。我记得上一次你们介绍，第一台应该是在4月投产，所以可不可以告诉我们现在的发电跟供气的情况？第二个问题是关于另外一家公司，华电，它今天公布了会投资他们集团一个煤炭的企业，我想问你们公司有没有同样的一个计划？谢谢。好，我来回答你这两个问题。上海这个燃气轮机现在还在建设，预计应该在这个月底之前，第一台机组应该投入商业运行。现在关于气价和电价，仍然在谈判之中，还没有最后的结果。关于投资煤矿这个问题，我们华能集团在过去两年里，投资了大概有6座煤矿。当这6座煤矿在两三年之后建好的话，将会有8000万吨的产能。作为上市公司华能国际，我们没有投资煤矿。 Simon有没有跟进的问题呢？黄总，就是没有计划去投资在集团那个煤炭公司？没有。没有，OK，谢谢。好，谢谢李先生。接下来是汇丰的李先生，也是李先生，Michael Lee from HSBC。管理层你们好，我是汇丰银行的李浩章。我有一个问题想请问，今年国家的调峰电价会有什么变化？另外，会否在更多地方推行这个计划？谢谢。我们好像没有调峰电价。调峰电价指的什么呀？就是在夏天的时候可以收比较高的电价。好，请黄总回答一下这个问题。华东地区在夏天是在用户侧推行的峰谷电价，跟我们发电公司的影响不大。那么四川省是在购电侧实行了峰谷电价，和我们公司的影响也不大。因为我们水电在四川，第一容量比较小，第二它的价格体系和火电还不太一样。是。好，Mr. Lee有没有跟进问题？没有，谢谢。好。黄总，现在我们暂时还等其他的提问，但是有几个外语的分析员，想了解一下刚才讲的话的重点，用英文再讲一下，可不可以？可以。你帮我翻译一下刚才那个。 OK, regarding this combined cycle in Shanghai, for the fourth unit, which was scheduled to be into operation by the end of this month. Right now, still under construction. Regarding this power tariff, regarding this combined cycle, still under discussion with relevant authority. A question about if Huaneng Power International will invest in coal mine like Huadian does. Our answer is that China Huaneng Group will invest in coal mine. As far as Huaneng Power International is concerned, do not have plan to invest in the coal mine. About the coal situation, the fourth quarter, the unit fuel cost is the same as the last year is due to the price increase for the coal is not that high. Also the quality of the coal was improved. OK. 好，谢谢，谢谢。接下来的提问仍然是Morgan Stanley的Simon Li，李先生你接着来吧。好，黄总，我想跟进刚才你们集团发展煤矿的问题。你说如果投产以后有8000万吨，我想问你们跟集团有没有一个协议，譬如说有一些优先购买煤矿的权利？这个是第一个问题。第二个问题就是关于煤电联动，黄总，可不可以请教一下，最近有没有听说一些最新的消息？因为前几个星期有一个内地的一个报纸说，煤电联动可能电价是16块钱，比以前市场想的10块钱要高。好，关于第一个煤矿的问题，我来回答。煤电联动，请黄总来回答。华能集团在煤矿上的进行投资，主要是投资了大概是7座煤矿。在这7座煤矿里，华能集团所拥有的股权，从39%到85%都有。像我刚才说的，全部建成投产以后，产能达到了8000万吨。我们在现在华能国际和华能集团还没有签用煤的这种协议，但是我想华能集团投资煤矿，肯定对华能国际用煤是有极大的帮助的。好。煤电联动请黄总来回答。关于煤电联动，目前我们掌握的消息跟我们上个月在香港差不多。煤电联动，国家正在李先生可能翻译翻好不好？那行，我们先把刚才那个煤炭。对，好。煤炭。 Huaneng Group has invested in seven coal mines with its interest ranging from 39%-85%. In 2 or 3 years, these coal mines will come into production, and their total capacity will be amounted to 80 million tons per year. Currently, there is no agreement between this coal and its parent regarding the fuel purchase from the parent, and there is no arrangement to give HPI preferential rights in producing the coal used by these coal mines. But we can reasonably expect that the investment into the coal mines will certainly help Huaneng Power to source coal more efficiently and effectively. 到我了。把那个电价，把那个联动说完，我再整个讲。关于煤电联动这个事，应该说跟我们上次在香港业绩披露时候，掌握的情况基本上是差不多了。煤电联动按照我们的理解，应该今年能够启动。现在我们公司正在非常密切地关注这件事情，但是我们现在目前没有什么情况可以和投资者来进行交流。一旦有确切的消息，我们会在尽可能快的时间内向投资者公布。 As to the second pass-through and the fuel pass-through policy, we haven't got any information that's different from what we already told our analysts at our Hong Kong briefing. We understand that the government is going to kick off with the second round of fuel pass-through. We are closely following the development, but right now we do not have any new information to disclose. Once we have got some certain news, we will disclose the information in a timely fashion. [Foreign language] It's very welcome if you would like to ask your questions in English, and again, if you ask a question, please push one on your telephone pad. All right, the next question now comes from Guosen Securities, Mr. Wu. [Foreign language] 各位管理层好，我有两个问题，一个问题还是关于煤价的。就是刚才邹总也介绍了，一季度我们的市场煤是采购了763万吨，合同煤是850万吨。然后我想问一下，我们能不能具体披露一下，就这两个市场煤、合同煤的一个均价情况，以及市场煤和合同煤相比于2005年一季度的一个变动情况。因为2005年年底年报推介的时候，我们说我们的合同煤可能上涨比例在5%以内。这个我想问一下，一季度我们的结算煤价没有大幅度变动，是因为市场煤下跌的一个原因，还是说有其他原因？这是第一个问题。第二个问题就是我想问一下，关于东北和华东这两个市场的一个竞价上网的情况，以及我们目前对于这两个市场下属的各个电厂的一个电价的结算方式。谢谢。好，第一个问题请邹总来回答，第二个问题请黄总来回答。一季度的重点合同煤的价格是每一吨CNY 342.70，市场价格是CNY 419。平均的结算价格是CNY 378.80。如果折合标煤价的话，是CNY 463每吨。 I have two questions. The first question is that just now the management mentioned the coal price in the first quarter of this year was. Sorry, the coal price in the first quarter was generally in line with that of the first quarter last year, and as the company procured 8.5 million tons of coal under the key contracts and also procured 7.63 million tons of coal on spot market. What are the average price for spot and contract coal respectively? As we understand that the company mentioned at the end of 2005 that it expected the contract coal price to increase in 2006 about 5%. The reason for the flat unit fuel cost in the first quarter, does that have anything to do with the decline in spot market price? Just now, Madam Zhou answered that the average price for the contract coal in the first quarter was CNY 342.7 per ton, and the average price for the spot coal was CNY 419 per ton. The weighted average was CNY 378.8 per ton. If we translate that into standard coal, the price was CNY 453 per ton. 下一个问题。我来回答电力市场竞价的事。东北的电力市场竞价的情况比较复杂一点。今年4月末、3月末进行了两轮竞价。竞价的结果由于整个东北三省发电厂的竞价的价格比较高，平衡账户出现比较大的亏空，所以竞价就暂停了。目前的电量仍然按照容量电费加CNY 0.19的电量电费进行结算。 The second question is regarding the power pooling situation in northeast of China. Currently, the situation there is quite complicated. At the end of March, two rounds of annual bidding were conducted and the average winning tariff was substantially higher than expected. As a result, there were substantial deficits with the balancing account in the three provinces of northeast China. As a result, the power pooling has been suspended. For the time being, the settlement is based on the capacity tariff plus CNY 193 per megawatt hour of provincial energy tariff. 华东的竞价是4月份，应该说是要进入模拟运行。到目前为止已经做了两场的场景的模拟。但是关于结算问题，现在还没有明确。即便是最终要进行实际的结算，整个的结算量也是作为整个竞价电量的10%来进行结算。其他的90%电量仍然按照国家批准电价进行结算。 In East China in April, two simulated operations have been conducted. For the time being, there is no clear policy on how the settlement will be done. Anyway, only 10% of the output will be actually settled based on results of power pool competition with the remaining 90% to be settled based on the regulated tariff. 好，谢谢黄总，谢谢周总。吴先生可以了吗？不好意思，我还想问一下周总，能不能说一下我们市场煤和合同煤2006年一季度和2005年一季度，它们两个比例变动情况，以及这两个煤最后均价和2005年同比变动情况？谢谢。 2005年的平均价格，一季度是CNY 372，2006年刚才我讲了CNY 378，相差CNY 6。这个是原煤是吧？是原煤。那个折合标煤。含税的原煤价。嗯。那如果把它折成标煤，就是不含税的标煤价的话，刚才我讲了，今年一季度是463，去年同期是458块钱。周总，您能说一下合同煤这边均价最后是和2005年比变动情况，以及市场煤的变动情况吗？那个。先翻译一下吧。 I have a follow-up question with respect to the coal price in the first quarter. Madam Zhou just repeated her answer that in the first quarter of 2006, average coal price was CNY 378 compared to CNY 372 in the first quarter of 2005. These are the price of raw coal including VAT. If we use the price of standard coal in the first quarter of 2006, it was CNY 463, and in the first quarter 2005 was CNY 458. 关于一季度的合同煤和市场煤的比例，我查一下数字，一会告诉你。 Regarding your question of the split between contract spot in first quarter 2005, I have to check my files and give you the answer later. 好，吴先生、周总，等一下我会再将这个数据告诉你，现在可以了吗？这样可以吗？可以的，谢谢。好，谢谢吴先生。接下来提问的是China Everbright的Allen Chen，光大证券的陈先生。管先生您好。这次我想问两个问题，第一个问题是发改委在4月10号起就把铁路运费平均提高了差不多0.40分。我想问一下，对于你们电力企业来看，成本压力会不会进一步加大？在公司那边看，如果真的有一些压力的话，会增加多少？第二个问题就是我看到了，现在就在4月1号起有显示是一个省份，资源税分别提高了差不多2.5元到3.2元不等。我想知道那些煤炭企业会不会把这些成本向下转移到你们身上呢？谢谢。关于铁路运费的问题，你说的是对的，它每吨公里。吨公里，4.4。提高4.4。这样子对我们公司的影响大概是要增加一亿元的运输成本。 I have two questions. The first question is that on April 10, NDRC announced that it is going to raise the rail rates by CNY 0.44 cents per ton-kilometer. Will company feel that increased pressure due to the rise in freight rates? What the impact is going to be like for the company? The second question is that on April 1, some provinces raised resource tax by CNY 2.5 to CNY 3.2. Will the coal mines affected intend to pass on that increased cost to the consumers like power companies? The answer to your first question was that yes, it is true that the NDRC has raised rail rates by CNY 0.44 cents per ton-kilometer, and that will result in an increase in transportation cost to the amount of CNY 100 million for this year. 到目前为止，我们还没有得到消息说哪个煤炭供应商因为资源税增加而要求提高煤价。 To answer your second question, so far we haven't received any contacts from the coal mines asking for raising coal price due to the increase in resource tax. 陈先生，陈先生你有问题吗？还有一个，不好意思，这是关于运费的那方面。我想看到你们有没有听过在4月10号提高运费以后会不会再加价呢？没有听说。没有听说过。你刚才说是一亿元不算在第一季的表内，没有的，对吗？什么意思啊？就是运费增加的成本在第一季度你们也没有看到，对吧？就是因为它在4月10号，在下一季度开始的嘛。对。谢谢。好，谢谢。陈先生先这里。谢谢。接下来的提问是BOCI的Violet Ye，中银证券的叶小姐。你们好，管理层。有几个问题，第一就是你们主营业务成本方面的构成可不可以说一下？因为煤的成本方面，单位原料成本是跟去年大致差不多，但是其实你们的capacity是增加了，那其他成本方面可不可以说一下？另外一个就是兖州煤说过在山东的煤价在一季度是跌了大概7%，想问一下你们在山东的煤的部分有没有享受到一个跌幅？还有就是全国，你们看煤价的走势会怎么样？然后第三个问题就想问刚才你们提过，在东北方面容量电价加193，那个容量电价是多少呢？那总体来说，跟你们原来的电价差别是怎么样？好，谢谢。大家先等一等，程立群马上就跟大家回答。好的，关于你提的四个问题，请邹总先回答你的第一个问题。好，我们成本项目燃料是52亿6千9，维修1亿9千3，折旧15亿2千3，人工成本6亿6千4，其他费用4亿1千2，合计80亿6千1。 To answer your first question, I will give you a breakdown of the operating cost in the first quarter of 2006. Fuel cost was CNY 5.269 billion. Maintenance cost was CNY 193 million. Depreciation CNY 1.523 billion. Salary CNY 664 million. Others CNY 412 million. Total cost means cost plus administrative expenses was CNY 8.061 billion. 关于兖州煤矿煤价下降，确实有这么一回事。但是公司在山东的电厂用山东本省的煤不是太多，就是济宁电厂，容量比较小，它用一点山东煤。所以这个在我们公司整个的燃料成本上表现不是太大。 On your second question, the coal price in Shandong declined by 7% in the first quarter. However, for our company, although we have a large exposure in that province, only Jining power plants actually source coal within Shandong Province, and the other power plants, they mainly source coal from outside of Shandong Province. Therefore, the decline coal price in Shandong Province has a very limited impact on the company. 关于全国煤炭的走势，我们认为目前煤炭的价格，虽然市场煤价格还是在高位运行，但是从目前情况来看，有可能有下降的趋势。 As to the overall trends in coal price nationwide, although spot price remains firm, we are seeing signs that coal price overall may decline going forward. 因为今年整个煤炭的供需基本上是平衡的。同时今年在一季度，市场煤的价格平均420块钱一吨，比去年是便宜了二三十块钱，三十块钱左右。 Because for the full year, we believe, generally speaking, there is equilibrium between demand and supply. Although, the fact that in first quarter, spot price of 420 was actually 20-30 CNY per ton lower than that of the first quarter of 2005 gives us some confidence in saying the coal price may soften going forward. 因为现在港存煤和厂存煤都还是比较充足的。 In addition, currently, there is relatively abundant inventory, both at coal mines and at ports. 至于东北的容量电价还没有变化，咱是按造价来划分，CNY 7,000一个千瓦以下的是51，CNY 7,000以上的是75，这个没有变化。 As to the capacity tariff in Northeast, currently, the method of classification hasn't changed. The power plants in the Northeast have been put in two categories based on their construction cost. For those with construction costs higher than 7,000 CNY per kilowatt, the capacity tariff is 75 CNY per megawatt hour. For those with construction cost less than 7,000, the capacity tariff is 51 CNY per megawatt hour. 好，谢谢。叶小姐，你还有跟进的问题吗？有，我想问一下，刚才提到06年的主营业务成本的构成，可以说一下05年同样的构成吗？等一下，等一等。说一下，等一等。周来。燃料是CNY 50亿1千8，维修CNY 2亿4千2，折旧是CNY 4亿8千9，工资CNY 5亿4千2，其他CNY 3亿4千7。总的，主营业务成本加上管理费是CNY 77亿3千7。好，谢谢周总。叶小姐可以了吗？可以再说一遍吗？或者是用—— 还有其他问题吗？可以啊，你再问。没有。没有了嘛，好，谢谢你，叶小姐。各位媒体朋友，现在再没有其他的提问了。黄龙副董事长，你有总结的话要跟大家说吗？我先把刚才问的一个问题，请周总再补充回答一下。好好好。刚才国信的先生问了一个关于05年第一季度重点合同和市场采购的煤量，我补充一下。05年第一季度重点合同采购量是667万吨，市场采购是752万吨，市场采购占了总量的53%，重点合同占了47%。好，谢谢周总。吴先生，如果再有其他提问的话，可以直接打电话给管理层。谢谢你。黄总，你有总结的话要说吗？谢谢各位参加今天华能国际的电话会议，感谢你们一直对华能的关注。咱们全国一季度的国民经济增长是10.2%，用电量的增长是超过了11%。应该来说，今年用电的增长还是比较旺盛的。公司在一季度的业绩，应该来说比去年的一季度有比较大的提高。我们接下来的时间里仍然要努力地多发电。同时争取把燃料成本控制得更好。与此同时还要努力工作，争取煤电联动有一个好的结果。总之，公司将一如既往地努力工作，为股东创造稳定的增长的回报。谢谢各位。 Thank you for taking part in this conference call. In the first quarter of 2006, the economy in China grew by 10.2%, while power consumption grew by 11%. We foresee very robust electricity demand growth for the full year, and the company's first quarter results is quite promising. As usual, we will continue to work harder to generate more power and keep good control on the fuel cost, and do our best to get good results under the fuel cost pass-through mechanism. As ever, we will continue to work toward delivering long-term and increasing returns to our shareholders. 黄总，我们还有提问，现在我们再有两个提问好不好？刚刚他们跟电话公司联系的。请问吧。好，就光大证券的陈先生带有提问。China Everbright, Mr. Allen Chen。陈先生请。陈先生。陈先生可能有点困难。再就另外这个Simon Li, Mr. Simon Li。喂？喂，陈先生你好。喂。 Simon,你好。你好。其实我不是有新的问题，是刚才那一条关于05年第一季度营业费用那条问题，可不可以你用英文说一次，或者是再说一次，因为刚才讲得太快。好，请陈先生用英文再说一次。 The cost mix in the first quarter of 2005 as follows: fuel costs CNY 5.118 billion, maintenance cost CNY 242 million, depreciation CNY 1.489 billion, labor costs CNY 542 million, others CNY 347 million. In total, cost plus administrative expense, CNY 7.737 billion. Simon。 Hi。 Is it OK? 谢谢。 [Foreign language] That concludes today's telephone conference, ladies and gentlemen. On behalf of Huaneng Power, thank you once again for joining us this evening.