State Grid Corp of China, the country's largest electricity distributor, said repairs to its national grid after last month's earthquake in Sichuan Province cost 34.6 billion yuan (US$4.99 billion).
The Beijing-based company faces a "direct economic loss" of more than 12 billion yuan from the temblor that struck the southwestern province on May 12, it said in an e-mailed statement yesterday. Sichuan alone accounts for 10.6 billion yuan, Bloomberg News said.
Five-month sales climbed 14.5 percent from a year earlier to 441.9 billion yuan while profit fell 80 percent to 2.9 billion yuan, following the worst snowstorms in five decades and the deadliest earthquake to strike the country in 32 years, according to the statement.
"The lower profit is due to the two natural disasters in the first half of the year," State Grid said, without saying whether the earnings were before or after tax.
State Grid spent 70 billion yuan in the first five months on maintaining and expanding its grid, an increase of 14.5 percent from a year earlier. The power supplier is facing "huge pressure" in trying to meet its 2008 profit target, spokesman Lu Jian said on May 23.
"Natural disasters will greatly hurt State Grid's profitability this year," said Wang Wei, an analyst at Guotai Junan Securities Co. "But the repairs will boost orders for manufacturers of power cables and equipment."
State Grid distributes power in 26 provinces and regions, covering 80 percent of China.
The Beijing-based utility fixed almost all the transmission lines and substations damaged by the quake.
(Shanghai Daily June 5, 2008)
