Huaneng Power International Inc posted a net loss of 3.9 billion yuan in 2008 on soaring coal costs, compared with a net profit of 6.1 billion yuan in 2007.
China's largest listed power producer by capacity showed operating revenue of 67.6 billion yuan last year, up by 35.8 percent from 2007, Huaneng said in a statement to the Hong Kong stock exchange yesterday.
"Owing to the impact of the drastic surge in international energy prices and tight supply of coal in the domestic market, domestic coal prices were at a record high in 2008. It put tremendous pressure on the company's operations," Huaneng said in the statement.
The unit fuel cost of Huaneng increased by 46.5 percent from a year earlier, said the statement.
In 2008, Huaneng's total operating expenses stood at 68.7 billion yuan, a 64.8 percent increase from a year earlier. The increase was "primarily attributable to the increase in fuel prices, the operation of new generating units and acquisitions," the company said.
Analysts said this year would be easier for the company. "Huaneng can make profits this year because of a drop in coal prices," said Xu Yingzhen, an analyst with Guosen Securities in Shanghai.
Spot thermal coal prices in China touched a record high of over 1,000 yuan a ton last July. Now, it is hovering around 550 yuan per ton.
Huaneng yesterday said it had not signed any key thermal coal contracts with China's coal producers.
The country's top five power producers, China Huaneng Group, China Datang Corp, China Guodian Corp, China Huadian Corp and China Power Investment Corp, have all not signed this year's coal contracts, as they could not agree with coal producers on fuel prices.
Domestic coal miners aimed to charge power producers 10 percent more for the fuel under the 2009 annual contracts, while power producers wanted a price cut of as much as 10 percent.
Since some of Huaneng's power plants are located in coastal regions, the company said it would be able to import coal to ease its dependence on domestic coal producers. Huaneng said coal purchase prices during the year would be lower than that of last year's.
(China Daily April 2, 2009)
