CLP Holdings, the leading power utility in Hong Kong with significant operations in Australia and India, announced a remarkable sevenfold increase in profits for 2023. This surge was primarily driven by a turnaround in the fair value of its forward energy contracts. Despite this impressive growth, the company’s earnings fell short of market expectations, largely due to a decline in revenue.
The company reported a profit of HK$6.66 billion (US$851.3 million), a substantial increase from HK$924 million in the previous year. However, revenue saw a decline of 13.4 per cent, amounting to HK$87.17 billion. These figures were below analysts’ expectations, with a median forecast of HK$7.31 billion for profits and HK$93.71 billion for revenue.
CLP attributed the positive fair value movements, particularly related to EnergyAustralia’s forward energy contracts, as a key factor in its improved performance. These movements reversed from a loss of HK$2.979 billion in 2022 to a gain of HK$2.125 billion in 2023, contributing significantly to the company’s operating earnings of HK$12.252 billion.
Operating profit before fair value adjustments also saw a healthy increase, rising by 33 per cent year on year to HK$10.13 billion in 2023. The company maintained its dividend payment, announcing a fourth interim dividend of HK$1.21 per share, unchanged from the previous year, resulting in total dividends of HK$3.10 for 2023.
Looking ahead, CLP emphasized its commitment to decarbonization, highlighting its Climate Vision 2050, which aims to achieve net-zero greenhouse gas emissions by midcentury. CEO Chiang Tung-keung stated, “Decarbonization stands as the foremost priority for our business,” emphasizing the company’s dedication to aligning its strategy with the latest developments and external risks.
Chiang, who took over as group CEO in mid-2023, became the first Chinese national to hold this position. With power generation currently accounting for around 60 per cent of Hong Kong’s carbon emissions, CLP’s focus on decarbonization reflects its proactive approach to addressing environmental challenges and ensuring sustainable growth.
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