Earnings Call: Q2 2006

Aug 16, 2006

Good evening, ladies and gentlemen. On behalf of Huaneng Power International Inc., thank you very much for joining today's telephone conference. As you know, the conference is about the company's year 2006 interim results. My name is Raymond Hill from Rice Communications Limited, your moderator for today's conference。我首先代表华能国际电力股份有限公司谢谢大家参加今天有关公司2006年中期业绩的电话会议。我是伟世企业通讯的肖伟明，这个电话会议的主持人。Before we start, let me first introduce the company's senior management members who join us this evening。在会议开始之前，我先介绍一下今天出席电话会议的华能国际的管理层。Vice Chairman Mr. Huang Rong 副董事长黄荣先生。黄先生，你好。大家好。 Vice President Mr. Huang Jian 副总经理黄健先生。黄总，你好。大家好。 Chief Accountant Madam Zhou Hui [Foreign language]. 大家好。 [Foreign language] Securities Representative and General Manager of the Capital Market Department Ms. Jia Wenxin [Foreign language]. [Foreign language]. 你好，大家好。 In a minute, company Vice Chairman Mr. Huang Rong will first walk you through the interim results for 2006. Then Mr. Huang and the management team will be happy to answer any questions that you may have. [Foreign language] Let me now call upon Mr. Huang. [Foreign language]. 女士们，先生们，大家晚上好！欢迎大家参加华能国际2006年中期业绩发布电话会议。昨天公司召开了董事会，随后公布了中期业绩。今晚通过电话会议，希望能与境内外的投资者和分析师，就公司上半年经营业绩和今后业务发展进行交流。 Good evening, ladies and gentlemen. Welcome to Huaneng Power International 2006 Interim Results Conference Call. Yesterday, the company convened board meeting and subsequently released its interim results. Today we would like to take this opportunity to communicate with investors and analysts from home abroad about company's operating results in the first half this year and its future business plan. 2006年上半年，按国际财务报告准则计算，公司经营收入198.35亿元，比去年同期增长了5.2%。权益净利润为21亿6700万元，比去年同期增长29.04%，每股盈利为0.18元。按照中国会计准则计算，公司实现收入198.62亿元，同比增长5.31%，净利润19.86亿元，同比增长22.59%，每股盈利为0.16元。董事会对上述业绩感到满意。 First half of 2006, based on International Financial Reporting Standard, company reported revenue of CNY 19.835 billion, revenue increase of 5.2% over same period last year. Profit attributable to equity holders CNY 2.167 billion, revenue increase of 29.10% year on year was CNY 0.18. According to the PRC GAAP, the company realized operating revenue of CNY 19.862 billion, that's an increase of 5.31%. Net profit was CNY 1.986 billion, that's an increase of 22.59%. Earning per share was CNY 0.16. The board is satisfied with the above results. 2006年上半年，公司在建项目如期投入商业运行，新增权益发电装机容量2077.8兆瓦，提高了电力供应能力，为公司售电量同比增长做出了贡献。公司售电量比去年同期增长2.23%。同时，主要受去年5月首次煤电联动翘尾影响，平均结算电价比去年同期有所上升，提高了每兆瓦时9.79元，为335.31元/每兆瓦时。公司采取多种措施控制燃料成本，平均售电单位燃料成本为每兆瓦时155.98元，比去年同期下降1.67%。另外，公司规划项目前期工作进展顺利，华能上安电厂三期项目2台600兆瓦燃煤机组，以及华能淮阴电厂三期项目2台330兆瓦燃煤机组获得国家核准批复。下半年公司将面临的机遇与挑战并存。一方面仍有大量新机投产，全国电力供应紧张形势明显减缓，火电利用小时仍将下降。另一方面，新一轮煤电联动政策已出台，公司电价水平也将有所提高。全国煤炭供应基本平衡，对公司控制燃料成本创造了有利条件。公司有充分的信心把握机遇，迎接挑战，全面完成今年的各项工作任务。 In the first half of 2006, a few of the company's construction projects commenced commercial operation as scheduled, thereby increasing installed capacity on attributable basis by 2077.8 megawatts. The increased capacity contributed positively to the increase in the power sale growth, and as a result, the overall power generation increased by 2.23% compared with the same period of last year. In the meantime, due to the carryover effects of the tariff adjustments which took place last May, average tariff increased by CNY 9.79 per megawatt hour to CNY 335.31 per megawatt hour. The company adopted various measures to control fuel costs. Unit fuel costs in the first half of this year were CNY 155.98 per megawatt hour, which was 1.67% lower than the same period of last year. In addition, the company has made good progress with its planned projects. Shang'an Phase 3, two by 600 megawatts coal-fired units, and Huaiyin Phase 3, two by 333 megawatts coal-fired units, have received government approval. In the second half, the company faces both challenges and opportunities. On one hand, there's going to be large numbers of new units come on stream. The power supply shortage is going to further ease, and the utilization will continue to decline. On the other hand, the new round of fuel cost pass-through policy has been implemented. The tariff level of the company is going to improve, and nationwide, the coal demand supply is basically in balance. That has created a favorable condition for the company for the control of fuel cost. The company is confident in facilitating these challenges into various tasks for this year. The company always will put the maximization of shareholder value as its mission and operating objective through economics of scale and standardized management to continue to improve competitiveness and allow the company to develop in a sustainable, steady, and healthy manner and to deliver long-term shareholder value. We are confident with the company's future prospects. My colleagues and I are ready to take your questions. Thank you. Thank you for Mr. Huang. Now it's time for questions. If you'd like to ask a question, please push one on your telephone pad, and you may also push star zero for operator assistance at any time. Operator, do we have the first question? Operator? Thank you. We are checking the list. Okay. William, are you there? Operator, can we connect to Mr. Jung? Operator? Mr. Jung, please go ahead. Okay. Next question comes from Mr. Pierre Lau, Citigroup in Hong Kong. Pierre- Oh, sorry. We have a little bit of technical problems. We now would like to ask Mr. Pierre Lau from Citigroup. I have a couple questions. First one is that share what the capitalized interest in the first half of this year. Second question is that we've noted that unit fuel costs dropped 1.7%. Is it because of the improvement in coal quality or because of price drop? The capitalized interest in the first half of 2006 was CNY 419 million. 单位燃料成本下降两个方面的原因都有。标煤单价比去年同期下降了1.3%，为463块8毛5。另外，发电量比去年同期提高了1.81%，提高将近100大卡。 For the second question, both the improvement in coal policy and price drop contributed to the improvement in unit fuel costs. The standard coal price drops by 1.3% compared with a year ago to CNY 463.85 per ton. Heating value improved by 1.81% compared with the same period of last year. That's about 100 calories per kilogram improvement. 刘先生，你还有其他问题吗？有没有？没有了，谢谢。好，谢谢你，刘先生，谢谢你参加。 The next question comes from Merrill Lynch. Mr. Joseph Jacobelli. 美林的 Mr. Jacobelli. 你好，我是美林证券的岳崎瑶。Joseph Jacobelli from Merrill Lynch. 三个很简单的问题。第一个就是有关于投资，下半年公司打算总共投资多少？然后对于2007、2008、2009年的投资的预测是不是有什么变化？第二，我们想知道，理解一下贵公司对于下半年利用小时的看法。第三个，我想知道是否在这个东北，还有华东电价有没有受到任何竞价上网的实验的影响？谢谢。 Three questions. The first question is that could you share what the CapEx plan for the second half of 2006 and are there any changes for the CapEx plan in 2007, 2008, and 2009? Second question is what the management's expectation for the utilization hours in the second half of this year? Third question is any words on the power pooling in Northeast China and East China, especially in the test phase. 第一个问题请周辉女士回答，第二个第三个问题想请黄家坚回答。 06年的资本支出计划是210个亿，07年162.20，08年103.40。06年的下半年实际已经发生了75.6亿。 The CapEx plan for 2006 is CNY 21 billion, for 2007, CNY 16.22 billion, for 2008, CNY 10.345 billion. In the first half of 2006, we have already incurred CNY 7.56 billion of capital expenditure. 那先回答第二部分。利用小时，今年上半年比去年上半年下降了197个小时。 The average utilization hours of the company's thermal units decreased by 197 hours compared with the same period of last year. 下半年仍然存在下降的趋势，由于下半年新投产的机组可能更多，所以利用小时还会有下降。我们维持我们年初对全年的利用小时的预计。 We expect that the utilization in the second half of this year will continue to decline as more units are going to come on stream. We maintain our expectation for the full year regarding the utilization hours of our thermal units. 再回答一下区域电价市场的问题。那么今年东北、华东和华南都进行了一些竞价的试运行，或者是模拟运行，但是从目前情况来看，都没有进行正式的结算。特别是东北的竞价结果没有最后得到确认。 This year, in Northeast China, East China and South China, power pooling has been implemented on a trial basis. All these power pooling practices are still at experimental stage, and the tariff haven't been settled officially based on the result of the competitive bidding, particularly in the Northeast China. They haven't received any confirmation about the results of the competitive bidding. 东北的电价上半年是按照临时结算价进行结算的，那么现在电监会和发改委正在研究结算的问题，一旦有了结果，我们会在尽快的时间内把结果公布。 In Northeast China, the tariff has been settled based on a temporary tariff. Currently, NDRC and SERC are discussing how to resolve the issue. Once we have received any news, we will disclose the news to the investors. 区域电力市场建设工作还在推进过程中，由于上网电价和销价之间联动机制没有建立起来，所以未来可能会在这方面做一些工作。 The establishment of regional power markets is still progressing. But given the fact that there is no mechanism linking retail price with the on-grid tariff, therefore, a lot of work needs to be done in this regard. 听到了吗？好, 谢谢黄总. Joseph, do you have any follow-up questions? 对不起，我没有听清楚09年投资的预计，谢谢。 09年投资的预计，82亿。 The CapEx plan for 2009 is CNY 82.14 billion. Thank you very much. Great. Thank you, Joseph. [Foreign language] The next question comes from CLSA's Mr. Manoop. 黄总你好，各位记者你好。我是Manoop，里昂证券分析员。我有三个问题。那这样吧，我每个问题先提问，然后您先回答。我第一个问题是关于你们刚刚投产，在上海的燃机。我想知道这个燃机的基本情况，包括它的临时电价是多少，包括它们的气价到底是多少，今年气的供应有没有保证，包括今年跟明年的利用小时的预期是多少。最后就是，现在有没有盈利？ That is three questions. The first question is regarding the Shanghai combined cycle. I would like to know some information about this plant, including the tariff of the plant and the price of gas. Are there any assurances about the gas supply? What is the management expectation for utilization hours of the plant for this year and next year? Is the plant profitable at this time? 请黄建健回答这个问题。上海燃机三台390兆瓦的机组，分别于约6月、7月正式投产，投入商业运行。 The three by 390 megawatts combined cycle units of Shanghai commenced commercial operations respectively in May, June, and July of this year. 我们燃气的价格已经签订了，含税的每一立方米是CNY1.53。 We have already signed a gas supply agreement. According to this agreement, the price of natural gas supplied to Shanghai plant is RMB 1.53 per cubic meter, including tax. 商业运行以后，目前的临时结算价格是每兆瓦时CNY520。 The provisional tariff for the Shanghai combined cycle plant is RMB 520 per megawatt hour. 今年上海市分配给燃机的气量只有1.43亿立方米，只能发电16.5亿千瓦时。 This year, Shanghai Municipal Government has allocated 143 million cubic meter of natural gas to the Shanghai combined cycle plant. Therefore, based on the amount of the gas, the plant can only generate about 1.65 billion kilowatt hour of electricity. 由于上海天然气供应严重不足，燃机的发电小时达不到设计能力，今年只有设计能力的20%左右。所以按照这个发电量和电价来经营肯定是很困难的。但是据我们了解，上海市政府对于上海燃机电厂的经营困难，正在研究采取相应的解决办法。 Due to a severe gas shortage in Shanghai, this combined cycle plant can only operate at approximately 20% of its rated capacity. Therefore, based on the current price of gas and the expected utilization, this plant is in serious difficulties at the moment. To our knowledge, Shanghai Municipal Government is studying ways to provide relief to this plant. 谢谢。我第一个问题是关于投资收益，因为你们上半年的投资收益跟去年比的话，有大幅度上升。这里面可能大部分来自邯峰电厂跟深圳能源公司。我想知道这两个公司的贡献比去年上涨的幅度是多少？包括请郭烈成跟我们做一个分析，这两个部分未来几年它的发展是怎么样的情况？因为可能对外披露的信息资料可能不太很充分，因为是一个投资收益。 My second question is on the income from investment gain. This mainly relates to the company's interest in Hanfeng and Shenzhen Energy. Could you give us any color on the magnitude of contribution from these two companies and also comment on the future prospects of these two investments? Because the company hasn't provided a very complete disclosure about these investments. 对不起，请周辉女士回答这个问题。今年的投资收益一共是CNY 3.52亿，比去年的CNY 2.38亿多。这里其中的深能源是CNY 1.85亿，比去年是CNY 1.12亿，增加的是CNY 1,300万。这个主要原因是由于深能源的执行方法的改变。 In the first half of this year, investment gain was CNY 352 million, which was higher than the CNY 238 million reported in the first half of 2005. Shenzhen Energy contributed CNY 185 million, which was higher than last year's CNY 112 million. This is mainly due to the changes in depreciation policy for Shenzhen Energy. Hanfeng基本上与去年持平，去年是CNY 1.01亿，今年CNY 1.03亿。 For Hanfeng, the investment return basically remained flat. Last year, it was CNY 100 million; this year, CNY 103 million. 另外，我们去年年底入股华能财务公司，上半年有投资收益CNY 1,600万。 In addition, the company took a stake in Huaneng Finance last year, and this investment brought in a return of CNY 16 million in the first half this year. 长江电力今年是6,600万，去年是3,500万，这个差额主要是长江电力认股权证的收益。 For the company's investment in China Yangtze Power, the contribution from this investment in the first half of last year was CNY 63 million. This year it was CNY 56 million. This was mainly due to the gain from the share warrants. 好，谢谢周总。好，谢谢。那我最后一个问题就关于你们的中长期合同。因为前年你们签了好几个中长期合同，是供煤的合同，绝大部分可能到2007年应该就到期了。到期了以后，管理层有什么打算？是不是要延长？如果延长的话，价格会有什么变动？那如果没延长的话，会有什么准备？ My last question is regarding the medium to long term coal supply contracts. Because these contracts are about to expire in 2007. Will company intend to extend these contracts? If so, what will the price be like? What kind of changes are we expecting? 好，还是请周辉女士回答这个问题。煤炭的长期供应合同是2005年签订的。三年、也有五年。对，有三年也有五年的。 These medium to long term contracts were signed in 2005, and the duration of these contracts varies from three years to five years. 三年的到期是明年，2007年才到，到了以后可以继续延长，价格再重新商谈。 Some of these three-year contracts will expire in 2007, and we will negotiate with the suppliers for extension of the contracts. The coal price is subject to the negotiation between the two sides. Okay. Mr. Manoop, is okay? 好，谢谢郭烈成。 Okay. Thank you. The next question comes from Morgan Stanley, Mr. Simon Li. [Foreign language] 管理层你们好，我是Simon，Morgan Stanley。我有两个问题，其实也是跟进经常你们已经谈过的一些问题。第一个关于煤价。周晖刚才介绍了单位标煤单价是下调了1.3%。我想知道可能有两个因素在里面，第一个就是合同的部分跟市场的部分，百分比的变化是怎么样？第二个就是合同煤的单价跟市场煤的单价的变化，在这段时间当中的变化是怎么样？第二个问题是关于燃气的基础。刚才都介绍过，今年的供气情况可能是比较困难，我想问在管理层更深入的了解当中，知不知道供气的情况到什么时候可以比较好转？谢谢。 I have two follow-up questions. The first one is regarding the coal price. Just now, Madam Zhou mentioned that standard coal price decreased by 1.30%. There are two aspects to this question. Could you give us the splits between contract coal and spot coal, and also the price gap between the two types of coal? Is the gap changing? Could you tell us the difference between price of the contract coal and spot coal? Second question is regarding the gas supply to Shanghai plant. We understand that the plant has encountered some difficulties in securing gas supply. Based on your expectation, when will this problem be solved? 第一个问题请周晖女士回答，第二个问题请黄江先生回答。在上半年采购的3145万吨的煤当中，其中重点合同占了62%。那么重点合同的价格是每一吨CNY355.72。市场采购占了38%，市场价格每一吨CNY420.61。平均的结算价是CNY382.08。 Of the 31.45 million tons of coal we procured in the first half of this year, 62% purchased based on the key contracts, with the remaining 38% procured from the spot market. The price for the contract coal was CNY 355.72 per ton. The spot price was CNY 420.61 per ton. The average price was CNY 382.08 per ton. 回答第二个问题。据我们了解，由于民用天然气用量增长非常的迅速，所以燃气电厂的燃气供应出现了严重的供应不足。这个情况估计在09年以前可能不会缓解。 To our knowledge, the gas shortage in Shanghai was mainly caused by strong demand from household consumption, and the situation is unlikely to be resolved before 2009. Mr. Li, you have any further question? 有。第一个问题关于刚才煤的百分比跟价格，可不可以也告诉我们去年上半年的情况是怎么样？第二个问题关于刚才燃气的。黄总，你刚才说09年之前不能改善，是不是因为09年有一个计划，要建一个LNG的码头？我的意思就是你说09年之前不能改善，是不是有一个估算，是希望09年上海可以建一个码头，谢谢。我先回答第一个问题。 I'd also like to ask about the coal price numbers for the first half of 2005. To follow up on the second question, just how you mentioned that the situation is likely to be improved before 2009. Does that have anything to do with the planned LNG terminal, which is expected to be completed in 2009? 我先回答第一个问题。去年上半年，合同煤占了53%，价格为每一吨332块6毛3。市场煤占了47%，价格是426块钱一吨，平均376块8毛5。 370。 36。市场是420块钱。 426。 In the first half of 2005, the company's coal procurement splits between key contract and spot market purchase was 53% versus 47%. For the contract coal, price was CNY 332.63. For the spot coal, it was CNY 426, and the average was CNY 376.85. 再回到第二上海燃气的问题。据我们了解，我刚才说的09年之间缓解应该说是没有LNG的因素。据我们了解，缓解的因素可能是会因为北京的第二条陕京天然气进京和原有的现在的西气东输的地区加大的压力，或者是采取一种别的方式，另外寻找新的气源。与LNG没有直接的关系。 On the question of LNG terminal, when I said that the situation may ease in 2009, the LNG terminal is not in the picture. What I mean is that, by 2009, the Shaanxi to Beijing natural gas pipeline is going to be upgraded, and for the west to east natural gas pipeline, the capacity may be improved by twinning up the pipeline. I haven't taken into account the factor of LNG terminal. OK, Mr. Li, is it OK? 好，谢谢，没有问题了。 Thank you. Thank you very much. 下个问题是由海富通基金的曹燕萍女士提出的，曹女士，有请。黄总您好，各位高管好。我有一个问题是关于我们一季度和二季度环比的一些数字。因为二季度和一季度相比，单位电量的主营业务利润，我说的是国内会计准则的这个主营业务利润大概下降了一分钱。我想问一下这个主要原因是什么？包括二季度和一季度环比的净利润下降的幅度也比较大，我想问一下这个原因。那还有另外一个比较细节的就是，06年上半年和05年同期相比，单位电量的工资成本上升了13.8%。因为最近我们也看到国内对于电力行业工资福利往下调，好像也有比较多的舆论宣传。我想问一下公司上半年单位电量工资上涨的原因是什么？谢谢。 I have two questions. In the first half of this year, if we compare the results of quarter with that of the first quarter, we noted that operating profit on unit basis decreased by 1 cent per kilowatts hour, and there was a significant drop in net profits. Could you comment on the reason for such a decrease? The second question is that in the first half year, unit labor cost increased by 13.8% compared with the same period of last year. Given that there's a lot of media reports about the salaries and the compensations for the employees, could you explain the reason for the increase in labor cost? 请周菲女士回答这个问题。二季度的利润季度下降的主要原因有这么几个：因为按照通常的这个规律，二季度的电量通常都是比一季度要低，所以电量减少也减少了利润。另外一个原因，二季度折旧增加，比一季度增加了3,500万。第三个原因，因为发电量减少，我们安排了检修，比一季度要增加，减少了盈利。 The reason for the relatively poor profit in the second quarter compared with the first quarter was that normally, second quarter is a low season in terms of output compared with the first quarter. The outputs are not that high as the first quarter. Thus affected the profit growth. The second reason is that depreciation in the second quarter was CNY 35 million higher than that of first quarter. Although because of the relatively mild demand for electricity, we have arranged more maintenance in the second quarter compared with the first quarter. That has resulted in approximately CNY 100 million profit decrease. 关于工资增长呢，是有几个原因引起的。一个呢，是因为我们新机投产，那么原来是在这个造价里面核算的，那么这部分呢，现在就在工资里面，这个呢，大概占了5,000万。 There are several reasons for the increase in unit in the labor cost. The first one is that we have put a few units into commercial operation in the first half. As the construction of these projects completed, the original labor costs that included in the construction have now transferred in the labor cost. 第二。 This results in a 60 million increase. 第二个原因呢，是根据国家政策，员工的社会保险缴费基数上调，这样新增加的人工成本3,500万。 The second reason is because of the change in regulation regarding the social security contribution. That has resulted in an increase of CNY 35 million. The third reason is that we have set up a Shanghai power service company, thereby increased labor cost by CNY 45 million. But if you look at the units megawatts labor cost, the number in the first half of this year was actually lower than that of the number in the first half of 2005. I would like to add that, as we mentioned earlier, utilization decreased by some 200 hours. That has some significant impacts on the fixed costs on per unit basis, and the labor costs and depreciation costs are all increased. The next question comes from Daiwa Institute of Research, Mr. Alex Fang. I have a few simple questions. The first question is regarding unit fuel costs. At the beginning of the year, the company stated that it expects the full year unit fuel costs to increase by less than 5%, but does that prediction still hold? The second question is that the company just mentioned the full year utilization hours are expected to decrease by about 100-200 hours. What is your expectation for the full year in percentage terms? Third question is regarding the coal consumption rate in the first half of this year. We understand that last year's coal consumption rate was 337.1 gram per kilowatt hour. What is the number for the first half of this year? At the beginning of the year, we put forward 5% as the goal for the unit fuel costs in 2006. In the first half, unit fuel costs actually decreased by 1.63% compared to a year ago. For the second half of this year, the price for key contracts is not going to change. The spot price may fluctuate based on the shifting demand-supply balance, and also the transportation situation. In the later part of the year, people may start to stock up coal for winter, and also because of the two holidays, the Spring Festival holiday and the New Year holiday, the transportation may become tight again, and the demand for coal may also increase. As a result, spot price may spike up again. 关于供电煤耗，今年上半年是336.28克。 The coal consumption rate for power sold in the first half of 2006 was 336.28 gram per kilowatt hour. 比去年同期下降了0.4%，去年为337.53。 That was 0.4% decrease compared with a year ago, which was 337.53. 关于第二个问题。今年上半年下降了197个小时，那么下降幅度比去年上半年是下降了6.5%。 In the first half of this year, the utilization hours decreased by 197 hours or 6.5% compared with the first half of 2005. 我们年初的预计，今年的利用小时要比去年全年下降450个小时左右，7%左右。 At the beginning of this year, our prediction for the full year was a drop in utilization hours of 450 or 7%. 由于下半年新投的机组比较多，所以我们预计我们估计的这个数，应该说基本上符合目前的这个趋势。 As more units are expected to come on stream in the second half of the year, we expect our early assumption to hold. 如果天气能热一点的话，这个利用小时可能会好一点。 If we get warmer weather, then we may get a better utilization. 下面。是不是还有一个问题，供电煤耗的。我觉得他刚刚过了。刚才回答过了。问了。好的。 OK。谢谢。 OK. The next question comes from Deutsche Bank's Mr. Michael Tong. Mr. Tong. 管理层你们好，我有三个问题。第一个问题我想问一下，你们计算上半年业绩的时候，你们东北三个电厂的电价是按照什么样的水平来计算的？第二个问题是我问一下这个6月份宣布的第二次煤电联动，这两个月从你们电厂反映的执行的情况怎么样？那第三个问题就是关于公司在收购方面有什么样的展望？谢谢。 I have three questions. The first question is that when the company accounts for the contribution of your three plants in the Northeast China, what tariff level you use? The second question is what is current status of the implementation of the second round of tariff adjustment based on the mechanism of linking power tariff with coal price? The third question is that what is the company's expectation for acquisition in the second half of this year? 第一个问题，请周女士回答。上半年由于东北地区这个竞价暂停，所以上半年这个电价的结算是按照容量电价和市场的基础电量电价来计算的。 The power plant in Northeast China has been suspended and therefore the payments of power plant in there was based on the capacity payments and the benchmark tariff. 这个市场基础电量电价上半年是比较低的，每千瓦时194块钱。 The benchmark tariff was rather low; it was CNY 194 per megawatt hour. 那么如果加上容量电价的话呢，上半年东北三厂结算价平均是每千瓦时260块钱。 If we add the capacity payments, then the average tariff of our power plant in North China in the first half of this year was CNY 260 per megawatt hour. 关于第二次煤电联动执行情况，总的情况应该说都按照国家政策在执行。那么有几个比较特殊的，第一个是东北由于竞价的原因，所以这次煤电联动的幅度要在接下来刚才说的这个电监会和国家计委新的结算方案里面来考虑这个煤电联动的因素。那么第二个就是平凉电厂，它有一个电价调整的听证会议，需要开一个听证会，所以可能会有一些问题。平凉电厂去年的煤电联动执行情况也不太好。那么另外一点就是福建电厂今年没有调整，就是在计划里面就没有。那么除此之外，所有的电厂都按照国家煤电联动的调整幅度执行到位了。 The second question regarding the tariff hike for the thermal power plant and the fuel cost pass-through policy. Generally speaking, the implementation is going smoothly, but there are a few special cases. First is in Northeast China, as we mentioned earlier, there was a suspension of power pooling and the final settlement of the tariff is subject to a process whereby NDRC and SERC need to work out a workable plan for the settlement of the tariff issue in Northeast China. The second case is Pingliang Power Plant. The tariff adjustments at Pingliang needs to go through a public hearing process, and this hearing hasn't been conducted. I'd like to also mention that the tariff hike of last year at Pingliang was also not quite satisfactory. For Fujian Plant, there was no tariff adjustments for that power plant. All other power plants have received tariff adjustments based on the fuel cost pass-through mechanism. 关于这个收购的问题呢，公司跟往常一样，还是在寻求好的收购机会。 As to our acquisition, as always, we are still looking for attractive targets. Mr. Fang, you have further questions? 可以了，谢谢。好，谢谢你。下个问题是CSFB的Mr. Angelo Chen。陈先生，有请。王总、周总，你们好，Angelo。我一个问题就是，公司刚才你们gave了我们你们的资本开支的预算，未来几年。我想请教一下，你们现在的预算是用百分比多少的电力增长？全国来讲，未来两年到三年。第一个问题。好，谢谢你。 Just now you provided the CapEx plans for the next few years. May I ask what the company's expectation for power demand growth over the next few years on nationwide basis? 全国的电力需求。这个资本性的支出的话，现在是按照我们对已经要建设的项目的这个情况来安排的。 The company's CapEx plan is based on the company's construction projects and plan projects. 从今后几年电力的增长，我们是按照国家有关部门对电力增长的预测来作为基本的考虑点。 Our starting point for making such CapEx plan is based on the demand growth predictions forecast made by relevant government authorities. 比如说对今年的电力增长，有关部门预计是10%到11%，但是实际上上半年的已经超过了12%。 For example, the government prediction, the forecast for electricity consumption growth was between 10% and 11%. Actually, power consumption grew at 12% in the first half of 2006. 在明年后年的增长也大概是在10%左右的增长。 The forecast for power consumption growth for next year and the year after next year, also around 10%. 我们资本开支的安排的话，应该来说基本上是按照这个考虑来进行的。 I can say that our CapEx plan was basically devised based on such assumptions. 谢谢你啊，王总。谢谢陈先生. The next question comes from Electron Capital Management Mr. Ran Zhou. 周先生. 各位总你们好。在脱硫方面我想问几个问题。第一个是能给一个大概的数据，就是你们现在有多少电厂已经装了脱硫，并且在运行，然后未来你们计划是要再增加多少脱硫设备？然后另外再给一些关于脱硫的成本，先是CapEx在脱硫上面，然后还有它的maintenance cost，大概的一些数据。谢谢。 I have a couple of questions regarding desulfurization. The first question is that how many power plants have already installed desulfurizer system, how many such desulfurizer systems are up and running, and how many more power plants are going to install desulfurizer system? Could you share with us the cost of such system, including the CapEx to be spent in this regard, and also the maintenance cost to be incurred by the operation of the desulfurizer system? 公司目前脱硫的机组有洛黄的一、二号机，太仓的一、二号机，汕头的一、二号机。 Currently, there are several power plants that have already installed desulfurizer system, including units 1 and 2 of Luohuang, units 1 and 2 of Taicang, and units 1 and 2 of Shantou. 我们目前还有德州的三号机、四号机、淮阴的一号机、二号机、三号机、四号机，都在安装脱硫设备，它们都将会在2006年的下半年和2007年陆续投产。 Currently, we are installing desulfurizer system at Dezhou units 3 and 4, Huaiyin units 1, 2, 3 and 4. All these desulfurizer systems are expected to be completed in the second half of 2006 next year. 对于将来以后新建的燃煤机组都要求上脱硫设备。 In China, it is mandatory for all the new coal-fired units to have desulfurization systems. 每个千瓦的脱硫造价大概是CNY 350左右。 Per kilowatt costs of desulfurization system, it's CNY 350. 脱硫设备的增加将使每度电增加成本大约CNY 0.015到CNY 0.02。 The installation of desulfurization system expects to increase unit cost by about CNY 0.015-0.02 per kilowatt hour. 周先生可以了吗？我就再多问一句，比如说剩下的没有安装脱硫的，你们具体计划是比如说尽快来增加这些，来安装脱硫设备，还是有一些另外的考虑，有些可能小一些的电厂，你们是考虑不装，还是跟技术也有关系，还是能再具体说一下这方面？ As a follow-up, for the company's existing units that have not yet installed with desulfurization system, is company planning to install the system as soon as possible? Or is there any other considerations such as the company may want not to install desulfurization system on smaller units, and could you explain the reasons or rationale behind the company's plans? 对于正在运行的，原来没有装脱硫设备的电厂，要根据当地环保部门的安排和计划逐步地进行安装。 For the company's operating plants that have not yet installed with desulfurization system, the installation of the system will be carried out based on the plan and the requirement of the local environmental protection authorities. 公司重视环保问题，公司将会严格地按照当地环保部门的要求，及时地为运行的电厂安装脱硫设备。 The company attaches great importance on environmental protection. We will strictly follow the requirements of relevant environmental protection authorities and to install desulfurization system on a timely basis. 好，我就这些问题，多谢。谢谢你，周先生。 The next question comes from JP Morgan's Mr. Edmund Lee. [Foreign language]. 管理层你们好。其实我有三个很简单的问题。第一就是上半年的排污的费用是多少，跟去年同期来比较是多少？第二个问题是关于利用小时，其实明年，就是07年，管理层有没有比较具体的预测，可能会不会继续上涨？如果是的话，上涨多少？最后是关于东北的电价。今年的电价管理层刚才已经说了，但是其实去年上半年跟全年的比较，其实平均的电价是多少？这是东北竞价的那些电厂。 I have three simple questions. The first question is that could you share with us the pollution charges of the company in the first half of this year? How does that compare with the same period of last year? The second question is that you just mentioned the utilization hours of this year is going to decline. Do you have any specific numbers or forecasts for the utilization hour in next year and 2007? The third question is that Northeast China tariff is settled on a provisional basis. How does the provisional tariff compare with last year? 这个问题交给你就行了。今年上半年的排污费是CNY 2.17亿。是排污费还是财务费？财务费。排污费。排污费。排污费还是排放？排污费。排污费。是排污费。今年上半年是CNY 2.17亿，去年同期是CNY 1.72亿。 2亿1700是吧？对。去年是？ 1亿7200。06年的预计是5亿7200。 Sorry, the first question is regarding the pollution charge in the first half of this year. Madam Zhou Hui mentioned that the pollution charge in the first half this year was CNY 217 million, which was higher than the number of the first half of last year, which was CNY 172 million. For the full year 2006, the company expectation is CNY 572 million in pollution charge. 估计07年的排污费还会增加，计划是6亿5。 We expect the pollution charge in 2007 to be increased to CNY 650 million. 08年、09年因为脱硫装置发挥作用，所以排污费会比07年下降。预计08年是CNY 5.8亿，09年CNY 5.3亿。 Because of the installation of the desulfurizer system, we expect pollution charge to start to decline in 2008 to CNY 580 million and CNY 530 million in 2009. 第二个问题关于东北，去年上半年的平均结算电价是2毛9分7。 The settlement tariff of the Northeast China in the first half of last year was CNY 0.297 per kilowatts hour. 关于利用小时的问题，由于装置的容量的增长的幅度超过了用电需求增长的幅度，所以利用小时预计还会下降。 As the capacity growth continues to outpace demand growth, utilization will continue to decline. 关于07年利用小时数到底下降多少，我们需要看看今年全年的投产情况和明年用电需求的预测情况以后，会做出一个估计。 As to the specific utilization hour numbers for 2007, we need to make some calculations based on the capacity addition of this year and demand growth forecasts for the next year. Mr. Li, is it OK with you? 还有一个就是刚才说2毛9分7，这个是去年上半年的电价，对吗？那其实如果去年是下半年的话，是多少？东北上半年。上半年。去年上半年2毛9分7。他的下半年。下半年。去年东北全年去年也是。去年是。前面找。去年东北三省全年的平均电价是324.78。 The average tariff of the three power plants in Northeast China in 2005 was CNY 324.78 per megawatt hour. I am just looking for the number for the second half of Mr. Li, thank you very much. Yes, sir. Okay. The next question comes from River's, Mr. Henry Colby. Mr. Colby. Hi there. Thanks very much for the call. Just two questions. First, on the 2009 CapEx, could you just repeat that number? I did not quite catch it. Secondly, could you discuss your nuclear and hydro strategy? What assets you may consider there, and the scale of potential investment? Last question, is there a minimum utilization rate that you can run on? Is there a risk that we could go back to the 50% levels? The capital expenditure plan for 2009 is CNY 8.214 billion. Okay. On your third question, we believe a 50% capacity factor is too pessimistic. That is equivalent to about 4,000 hours of utilization. We don't think that scenario is quite likely. Let's just make a very simple calculation. Suppose demands will grow at 12% and capacity will increase at 16%, then there will be a four percentage points difference between demand growth and capacity growth. We can expect the utilization to decline at a similar rate, which is 4%. On the nuclear issue, for the time being, the company does not own any nuclear assets and has no plan to get involved in nuclear construction. The company will continue to focus on the thermal power generation. As to hydro power plants, currently the company has a small fraction of capacity in hydro. Recently, State Council has promulgated new rules regarding the compensation to the resettlements related to the construction of hydro power plants. The new rule will lift the compensation to the resettlement associated with the hydro construction. Therefore, the company is closely following the situation and making detailed studies. The company's operating scale is mainly based on the running of thermal generating units. Mr. Colby, is that okay with you? Yes. Thank you very much. Thank you. Thank you for joining us. HSBC, Mr. Elvis Ouyang. 管理层你们好，我是汇丰的欧阳。有几个问题想问一下。首先就是06年上半年运输成本是多少？跟去年同期比较是怎么样的？第二就是你们06年上半年合同煤的兑现率是多少？跟去年同期比较是怎么样的？第三个问题就是你们刚才提到，06年上半年跟去年比较，利用小时是下降197。我想知道加权平均的利用小时上半年是多少？谢谢。 I have three questions. First question is, could you provide the transportation cost for the first half of 2006 and how does that compare with the first half of 2005? Second question is, could you share the contract fulfillment rates in the first half of this year and how does it compare with the first half of 2005? The third question is, the utilization hours of the company's generating units declined by 197 hours. Could you provide the weighted average utilization hours of the company's thermal generating units in the first half of this year? 我先来回答一下利用小时。那么今年上半年，公司火电机组的加权平均利用小时是2832个小时。 To answer your third question, the weighted average utilization hours of the company's thermal generating units in the first half of this year was 2,832. 那么水电的利用小时，就是我们四川小水电的利用小时是1910个小时。 As we own a small hydro company in Sichuan, the average utilization hours of the hydro units in the first half of this year was 1,910. 这个运费的情况，海运费是每吨CNY 45.81。 The sea transportation freight rate was CNY 45.81 per ton. 这个比去年同期下降了5%。 That represents a decrease of 5% compared with the same period last year. 铁路运费去年是CNY 42，今年涨了8%。 The rail freight rate last year was CNY 42 per ton. In the first half of this year, we saw an 8% increase in the rail freight rate. 合同兑现率。这是煤的兑现率的问题。合同兑现率是78%，上半年。 The contract fulfillment rates in the first half this year was 78%. 欧阳先生可以了吗？可以，谢谢。好，谢谢你。有一个跟进的问题是美林证券的Joseph。Joseph please。你好，我要再补充一个问题，就是说今年我们看到整个国家的预测是，中国总共会加了7,200到7,500兆瓦的装机容量，明年可能在8万到8万5左右。公司有没有什么概念，在08、09是不是投入会慢下来，慢下来的很厉害，大概是多少？这是第一个问题。谢谢。 We are aware that according to some sources, China this year is expected to add about 72,000-75,000 megawatts of generating capacity. Next year, about 80,000-85,000 megawatts of new capacity will come on stream. Is there any possibility that the company is going to slow down its construction program in 2008 and 2009? 从我们得到的数据呢，今年大概是7,000多万千瓦投入运行，明年的话应该也是7,000多万千瓦，可能不会到达8,500千瓦。 From what we heard that this year, over 70,000 megawatts of new capacity will come on stream. Next year, similar amount of megawatts are going to commence operation. It will not be as high as 85,000 megawatts. 去年、今年、明年大量机组投入运行，实际上是和前几年有许多项目没有经过合法的程序就开始建设，导致有大量机组投入运行有关系。 Last year, this year and next year, a lot of units have commenced or are going to commence commercial operation. That has to do with the fact that a lot of power plants have been constructed, bypassing the necessary regulatory approval. 这些大量的额外的容量，在去年、今年、明年投入运行。从2008年以后，投入运行的容量肯定会降低。 From 2008 onwards, we believe the capacity growth will gradually taper off. 以后投资大概是5000万到6000万，在2008年、2009年。 We expect annual capacity addition in 2008 and 2009 to be 50,000-60,000 megawatts. Joseph，可以了吗？可以，谢谢。然后，关于你们上海那个燃气电站，现在就运行了几个星期，一立方米大概可以生产多少个千瓦呢？谢谢。 The Shanghai combined cycle has been in operation for several weeks. How many kilowatt-hours of electricity can this plant produce with one cubic meter of gas? 天然气每一立方米发电，按照现在的发电量是4.5千瓦小时左右，一立方米。单位不含税的燃料成本是31。 Based on the heating value of natural gas applied to the Shanghai plant, one cubic meter of gas can produce roughly 4.5 kilowatt-hour of electricity, and unit fuel cost is around CNY 0.31 per kilowatt-hour. 好，谢谢你们。谢谢。好，谢谢Joseph。最后的一个问题是更近的问题，是德国银行的Mr. Michael Tong from Deutsche Bank。Mr. Tong，还有点。黄总，我想问一下，你们华东电厂今年上半年的10%的竞价电量的电价情况是怎么样的？谢谢。 I want to ask about the competitive pool in East China, where 10% of output is supposed to be subject to pooling competition. 今年华东应该说还是属于试运行阶段。竞价的情况，价格情况不太好，因为江苏省特别是装机增长太多，所以竞价的情况比我们批准的电价要低一些，但是并没有实际进行结算。 In East China, there were some trial runs or simulations conducted. The results were not quite good. The major reason was the rapid increase in installed capacity in Jiangsu province, and as a result, the power pool price was lower than the approved tariff. But the actual settlement tariff was not based on the results of bidding. Mr. Tong, is it okay? 我就是说问一下，下半年这些电量的电费还是要结算的，是吗？华东这块应该不会结算，因为是有点试运行的。本来说要按照这个进电，后来也没有按照这个，连电量也不管用。这个价格应该说是非常的低，大家都有点试验性质的，所以我估计不会结算。谢谢。 We don't expect the tariff for power plants in East China to be actually settled based on the results of power pool bidding, because the power pooling in East China is still at an experimental stage, and the actual dispatch was not based on the results of bidding, and also because the tariff was rather low compared with the approved tariff. We don't foresee the full year tariff to be impacted by the power pooling. Okay. Thank you, Mr. Tong。黄荣副董事长，在结束之前，你有没有最后的补充？我想感谢各位参加华能国际今晚的电话会议，并且提出了很好的问题。我也要同时感谢周辉女士和黄健先生，认真地回答了大家的问题。也感谢景军先生提供了准确的翻译。同时的话也感谢Raymond组织了很有效的这次会议。上半年公司取得了满意的经营业绩。下半年我们仍然要继续努力，争取完成今年的任务，以好的经营业绩来回报股东。谢谢。 I'd like to thank everyone for taking part in the call. I'd also like to thank Madam Zhou Hui and Mr. Huang Jian for answering a lot of questions, and also thank the participants for putting forward so many good questions. I also thank Raymond for being a good moderator for this conference call. For the second half of this year, we will continue to work hard and to achieve our operating goals and to repay our shareholders. Ladies and gentlemen, that concludes today's telephone conference. On behalf of Huaneng Power, thank you once again for joining us this evening.