China’s power companies awash in red ink
China's five biggest power companies reported sharply wider losses in their thermal power ventures in the first seven months, hit by increasing costs of coal and financing, according to the latest figures.
Losses of the top five power generators in the thermal power sector totaled 18.1 billion yuan (USD2.8 billion) in the January-July period, expanding by 166.4 percent from a year earlier, according to a report by the China Electricity Council (CEC).
That brought the five companies' overall losses to 7.5 billion yuan in the first seven months, compared with a combined profit of 810 million yuan in the same period of last year.
The five power magnates include the China Huaneng Group, China Datang Corp, China Huadian Group, China Guodian Corp and China Power Investment Corp. These companies provide about half of the country's power.
Surging coal prices and higher financing costs weakened power companies' ability to gain profits, the CEC said.
China's benchmark power coal prices had increased for 14 weeks consecutively before starting to decline at the beginning of July, according to the Bohai-Rim Steam-Coal Price Index.
Heavy debt burden and rising borrowing costs also dented profits of the top five power companies, whose financing expenses grew 32.5 percent year-on-year to 52.8 billion yuan in the first seven months, said the CEC.