senior executives of the company
zhu yongpeng was delivering an speech
qiao baoping was attending the meeting
xie changjun was introducing business performance
questions from analyzers
questions from reporters
china longyuan power group corporation limited held a conference in hong kong to announce its 2012 interim results. in the first half year of 2012, longyuan power under the wise leadership of the board of directors closely focused on the job objective, sturdily pushed all jobs forward, and maintained the production and operation in a good state.
longyuan made the following excellent achievements through the first half year of 2012:
1. stable growth in profit
the group continued to bring in more comprehensive budget management by breaking down budget targets into different levels, imposing strict control on various costs and expenses and fully leveraging on its economies of scale. the group paid close attention to the national legislation of taxation and strived for reduction and exemption policies of income tax. in addition, it raised low-cost funds through various channels and sought swap of loans amidst the downward adjustments to interest rates of bank loans to reduce its financial costs effectively. during the first half of 2012, net profit attributable to shareholders of the group amounted to rmb1,460 million, representing an increase of 3.62% as compared to rmb1,409 million in the same period of 2011.
2. steady operation of power generation along with continuous improvement in the standard of wind power operation
in the first half of 2012, the group generated a cumulative gross electrical output of 14,333 million kwh, of which electricity generated from our wind power business accounted for 8,434 million kwh, representing an increase of 19.31% year on year.
3. project construction progressing ahead in an orderly manner
in the first half year, the group had one wind power projects newly put into production, one photovoltaic power generation project, with an additional consolidated installed capacity of 69.5 mw. it also completed the acquisition of seven wind power projects and four biomass power generation projects, with an aggregate installed capacity of 466.5 mw. as of 30 june 2012, the consolidated installed capacity of the group was 11,109 mw, among which the consolidated installed capacity of our wind power business, the consolidated installed capacity of our coal power business and the consolidated installed capacity of other renewable energies were 8,994 mw, 1,875 mw and 240 mw, respectively. the group’s projects, namely the 300 mw large-scale self-developed pilot project in guazhou, gansu, the 150 mw qilinshan phase i project in shangyi, hebei and the 200 mw project in laian, anhui were honoured as “2012 premium quality power construction in china”, giving evidence to the group’s leading position in project construction.
4. overall enhancement of fund raising capability and reduction of funding cost in full swing
to cope with the unfavorable impact brought by credit tightening and high funding costs in the first half of 2012, the group strived to reduce its funding costs via centralised capital management and overall enhancement of fund raising capability through diversification of its financing system as part of its effort to suppress the cost of funding as long as funds were safeguarded. in the first half of year, the company successfully conducted private issue of debt financing instruments of rmb4,000 million with average cost of 5.70% and received short-term debentures of rmb3,500 million. the group also unwaveringly carried out short-term financing initiatives such as accounts receivable factoring and trade chain finance so as to strengthen its fund raising capability and trim capital costs. as at 30 june 2012, the group had accumulated debentures of rmb22,500 million with average capital cost of 5.07%.
5. optimised layout and continuous improvement in development
in the first half of 2012, the group, based on the current situation and in the principle of pushing forward project development in an aggressive and prudent manner with an emphasis on economic benefits, laid store by the quality of feasibility researches on projects by implementing more stringent internal standards on project approval, so as to truly reflect and strictly control investment risks and secure investment returns. among the ‘twelfth five-year plan’ of the national energy administration, 38 projects were listed under the plan with an aggregate installed capacity of 2,259 mw, accounting for 13.5% of the total planned installed capacity and ranking the first as compared with other wind power developers. as at 30 june 2012, the group had a total of 87 projects to be approved under such plan with an aggregate installed capacity of 5,789 mw, of which projects in regions not subject to limitations on electricity output accounted for 49.0% and 86.8% respectively in the first batch and the second batch of national projects. in the first half of 2012, the group newly added 13 approved wind power projects with an aggregate installed capacity of 627.5 mw, which were located in yunnan, guizhou, shandong, jiangsu and southern shaanxi - regions with abundant wind resources, favourable conditions for construction, on-grid connection and power absorption, and prospects of development. as at 30 june 2012, the group’s accumulated pipeline capacity of wind power projects reached 63.85 gw with a reasonable layout. the group, established in key development regions with favourable resources and construction conditions, namely jiangsu and fujian, gradually gathered pace in offshore wind power development in regions such as liaoning, tianjin, hebei, shandong, zhejiang and guangdong. in the first half year, the group’s offshore wind power projects have commenced operation with a capacity of 131 mw, of which the operating capacity of the first domestic offshore (intertidal zone) pilot project ranked the first among its peers. the group also approved offshore wind power projects with an installed capacity of 230 mw, 50 mw of which was approved during the reporting period. besides, the group entered into an offshore wind power development agreement on projects with an installed capacity of 5,900 mw.
6. emphasis on technology innovation and talents cultivation along with reinforcement of core competitiveness
18 new technology projects were launched in the first half of 2012, among which 4 are high technology projects under the national 863 planned projects approved by the state ministry of science and technology, 2 are projects of 973 plan, 4 are technology projects initiated by guodian group and 8 projects initiated by the company. the group was honored with a 2nd class award for technological advancement of 2012 from china guodian corporation for self-developed technology projects, namely “new model and application of condition monitoring of key equipment in wind power generating units and “research on the estimation of power generation and wind power (loads) prediction system of wind farms”．meanwhile, the group deepened efforts in the building of an expert team and enhanced the group’s core competitiveness through management, technique, power generation and efficiency competitions among employees from wind power enterprises under guodian group. it improved the mechanism of cultivation and evaluation of experts and refined the incentive mechanism in this respect. during the reporting period, three frontline staff of companies of the group were awarded “technical experts of central enterprises” by state-owned assets supervision and administration commission of the state council. solid expertise, state-of-the-art techniques and outstanding quality set its employees apart from others.
in spite of the various challenges surrounding the world economy and certain issues and uncertainties hanging over china’s new energy development, the state will continue to foster new energy development as a whole and a new energy industry reform has become an inevitable trend. against this backdrop, the new energy industry still sees ample room for development. as liu tienan, director of national energy administration, indicated in “qiushi” (issue 13, 2012): during the period of the “twelfth five-year plan”, china will unswervingly develop new energy and renewable energy through orderly development of wind power, expediting comprehensive utilisation of solar energy and progress would be made in biomass energy, geothermal energy and other new energy. a distributed energy system will be promoted to maximise the contribution of new energy and renewable energy in the restructuring of its energy portfolio. relevant parties have already noted with great concern over certain problems revealed in the development of the wind power industry. governments at different levels, grid companies, power plants and other relevant departments are adopting countermeasures with a certain degree of success. from now on, the state will pay more attention to the standardisation of new energy development. control over wind power development planning will be tightened and project approval procedures will be strictly complied with. the pace of establishing a regime of industry standards will also be quickened, all but to grapple with the problem of grid connection of wind power and accumulation in the market. currently, the “administrative measures for renewable energy quota system”issued by national energy administration is soliciting public opinion, which is expected to be promulgated by the end of the year. it is foreseeable that the wind power industry will gradually see standardised and sound development.
in recent years, the group has achieved breakthrough in charting its course to innovation and new progress in strengthening its management. these led to a notable increase in its overall competitiveness, continuous optimisation of its wind power distribution and energy portfolio as well as stronger resilience against risk. the unity and harmony which favor its development have become all the more significant, while its industry presence and brand influence improved continuously. as a whole, the current situation is favorable for the group’s sound and sustainable development. with a view to measure up to operational targets set for the year, the group will focus on the following tasks in the second half of 2012: 1) comprehensive measures to safeguard electricity output; 2) speed up construction progress in full swing; 3) optimise investment strategy; 4) strengthen internal management; 5) foster corporate transformation.