CLP HOLDINGS (00002): Fuel costs may trend upwards in the short term.

CLP HOLDINGS (00002) CEO Dongqiang Jiang stated at the online meeting for the half-year results that the current monthly fuel cost adjustment mechanism has a lagging effect, adjusting based on the actual fuel prices of the past three months, to mitigate the impact of electricity price fluctuations. From January to August of this year, oil prices have varied significantly, resulting in a cumulative adjustment of about 4% in Hong Kong electricity prices, showing a gradual increase. According to current oil price trends, fuel costs may rise in the short term, but the specific situation at the end of the year will depend on the oil price fluctuations at that time. The group will continue to reflect this on a monthly basis in the relevant mechanism in a "cost reimbursement" manner. Dongqiang Jiang added that the group has launched a special fuel fee rebate for three months (from August to October), providing a relief support of 8 Hong Kong cents per kWh for eligible residential customers, which is expected to benefit about half of the residential customers. The group has also adopted a diversified procurement strategy to reduce the impact of international fuel price fluctuations. Regarding the development of the Northern Metropolis, Dongqiang Jiang stated that preparations have been made for the backbone of the electricity grid in the Northern Metropolis, and future plans will align with the government's development pace to provide electricity in a timely manner. The current five-year development plan is expected to invest 2.5 billion Hong Kong dollars in the construction of the Northern Metropolis grid. To support the development of innovation and technology industries, especially the demand from data centers, eight substations have already been put into operation, with a total of 18 substations planned to power data centers. The group's Australian business, EnergyAustralia, experienced a weaker power generation business in the first half due to the declining environment in the wholesale electricity market. Dongqiang Jiang pointed out that the recent mild weather and the increase in energy storage projects have led to lower energy demand than expected, which has also resulted in reduced electricity prices. This situation is likely to persist in the short term and may pose pressure on the Australian business. However, as its coal-fired power plants gradually exit the market, the value of the flexible generation and energy storage assets held by the group in the region is expected to increase; local data centers are rapidly developing, which is likely to drive electricity demand, and he holds an optimistic view on this. He added that the group is also actively seeking to invest in more zero-carbon energy projects outside of Hong Kong, including renewable energy projects. Currently, there are more than 50 such projects in the mainland, and it will continue to expand in the future. At the same time, it is actively exploring investment opportunities in zero-carbon energy in Southeast Asia, including Taiwan, Vietnam, and Laos. Regarding the dividend policy, Dongqiang Jiang reiterated that the group's goal is to provide a stable and sustainably growing dividend based on continuous business growth. As for whether the group will distribute a special dividend in celebration of its 125th anniversary this year, Jiang stated that dividend policies are determined by the board of directors, and as of now, there are no arrangements for distributing special dividends. CLP HOLDINGS interim results for 2026 showed that the group achieved revenue of 42.856 billion Hong Kong dollars, flat year-on-year; net profit attributable to shareholders was 5.997 billion Hong Kong dollars, an increase of 6.63% year-on-year; earnings per share were 2.37 Hong Kong dollars, with an interim dividend of 0.63 Hong Kong dollars per share proposed.