Hong Kong utility CLP posted a 15% jump in first-half earnings as data-center demand surged and its Australian business swung back to profit after two years of losses.
CLP Holdings posted a 15% jump in first-half earnings, driven by rising electricity demand from Hong Kong data centers and a turnaround in its Australian business after two years of losses.
The Hong Kong utility reported underlying earnings of HK$6.2 billion for the six months through June, up from HK$5.4 billion a year earlier. Revenue rose 8% to HK$47.8 billion.
CEO Tung Keung Chiang said the company was seeing "very strong demand growth" from data-center operators setting up in Hong Kong, with power consumption from the sector up 22% from a year ago. That helped offset a 3% decline in residential and commercial usage, which he attributed to milder summer weather.
"Data centers are reshaping our load profile," Chiang said on the earnings call. "The first half was a strong start to the year."
The Australian business, which had dragged on group results through 2024 and 2025, swung to a small profit after EnergyAustralia cut its exposure to volatile wholesale markets and locked in lower-cost generation contracts. The unit posted earnings before interest and tax of HK$420 million, compared with a loss of HK$310 million in the same period last year.
CFO Alexandre Jean Keisser said the improvement came from a combination of hedging and reduced coal-fired generation costs. "Australia is no longer a drag on the group," he said.
The company declared an interim dividend of HK$0.63 per share, unchanged from last year.
CLP's regulated Hong Kong business, which supplies electricity to Kowloon and the New Territories, reported a 6% rise in operating profit. The company is in the middle of a five-year tariff agreement with the Hong Kong government that caps returns at 8% on average net fixed assets.
Capital expenditure for the half came in at HK$5.1 billion, with roughly half going toward grid upgrades and the rest to renewable-energy projects in mainland China and Australia. Chiang said the company was on track to spend HK$12 billion for the full year, in line with its earlier guidance.
Shares of CLP, which have gained 9% this year, trade at about 15 times trailing earnings. The stock yields roughly 4.7% based on the current dividend.
Morgan Stanley rates the stock at Equal-weight with a HK$68 price target. Citigroup rates it at Buy with a HK$78 target. Both analysts were on the call.
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