On 26 August 2016, the 11th meeting of the 8th Session of Board was convened to deliberate and approve 2016 interim report and other proposals. Hosted by Director Zhang Xiaolun, 8 directors attended the meeting, with all members of the Supervisory Committee, heads from the Board Office, Department of Finance, Department of Development and Planning attending as nonvoting delegates. The meeting deliberated and unanimously approved 2016 interim report, the 13th Five Year Development Plan, particulars of guarantee, proposal to convene the first extraordinary general meeting in 2016 for election of director and so on.

In the first two quarters, the company struggled and managed to keep production and management under control. We accomplished an output capacity of 13051.5MW, a YoY decrease of 30.9%; the new orders coming in force amounted to RMB 28.5 billion, a YoY increase of 32%, which guaranteed substantially our domestic market share in thermal power and nuclear power; the market exploration overseas boasted a new breakthrough with Hamrawein ultra-supercritical thermal power project (phase I)3×660MW EPC contract agreement, Turkey Hema 2×660MW ultra-supercritical thermal power EPC project contract successively signed. Up until 30 June 2016, the backlog of the company reached RMB 124.1billion. Meanwhile in the first half of 2016, the centralized management of capital and greater efforts in collection of outstanding debts helped to realize an increase in net cash flow compare to the same period of last year.

The decreased market demand in power equipment and the product price fall that resulted from a slackening growth of domestic macro economy have incurred the drop of gross profit margin; a hard recovery of payment is drawn from the slowdown of power project construction and the aging account receivables and ever growing balances of receivables above 5 years are becoming prominent. The substantial increase in provisions for bad debt of current period accounts for the underwriting losses in the interim results. Calculated under Accounting Standards for Chinese Enterprise, the total operational revenue amounted to RMB 18.22billion, up YoY 0.08%; the net profit attributable to the shareholders of the company amounted to RMB -342 million, down YoY RMB 510 million; earnings per share reached RMB -0.15; consolidated gross margin rate as against to the total is 10.95%, down YoY 0.96%.

In the latter half of the year, influenced by a continued downward pressure of domestic economy, the imbalance between power demand and supply as well as the “three-batch” policies, the number of new thermal power projects will be sharply declining, rendering a much severer competition in the market. The company, under the focus of “reinforcing efficiency and bolstering competency”, will make unremitting efforts to innovate and develop, enhance management, deepen reform, adjust structure, transform and upgrade and ameliorate economic operation. We will go all out to expand markets for orders, improve efficiency and reinforce management, promote core competitiveness by innovation, move steadily with power plant services by quality enhancement and delivery guarantee, and realize sound operation by risk control and safe production, with a view to solidify sustainable, steady and healthy development for the 13th Five Year Period.

The interim report was duly disclosed both in Mainland China and Hong Kong on 27 August 2016.

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