Shandong Xinneng Taishan Power Generation (000720) posted a first half loss of 107 million yuan despite a 2.97 percent rise in revenue to 1.37 billion yuan, reports Securities Daily.

According to the company, its Laiwu Power Plant received compensation of 88.48 million yuan last year for the dismantling of outdated capacity.

Coal prices stayed at elevated levels in the first half, resulting in huge losses for thermal power generation companies.

The government had raised the required reserve ratio and loan interest rate several times this year, adding to the financing burden.

Gross margins dropped 3.26 percentage points year-on-year.

The gross margin of its power generation business fell 4.03 percentage points year-on-year, while that of its heat supply business was down 6.62 percentage points.

For the first three quarters, the company forecasts losses of 140-220 million yuan for the first three quarters.

According to data from information provider Wind, 19 power generation companies which had released their first half report had recorded a 20.35 percent year-on-year decline in total net profits to 2.34 billion yuan. Ten out of the 19 companies recorded net profit declines.

Although the National Development and Reform Commission had raised power prices in April, Huaneng Group, Datang Group, Huadian Group, Guodian Group, and China Power Investment Group recorded total losses of 6.65 billion yuan in the first half, widening their losses by 5.09 billion yuan year-on-year, according to the China Electricity Council (CEC).

Thermal power generation companies posted losses of 15.38 billion yuan in the first half, increasing their losses by 9.52 billion yuan year-on-year.

Domestic coal prices had risen by more than 200 percent since 2003, while power prices were up by less than 40 percent, added the CEC.
 

Source:CapitalVue