Nov. 8 (Bloomberg) -- CLP Holdings Ltd., Hong Kong’s biggest power supplier, fell the most in almost a month after saying the passage of Australia’s clean-energy legislation may erode earnings.
The shares dropped as much as 1.6 percent, the most since Oct. 12, and were at HK$69.95 as of 2:30 p.m. local time, down 1.3 percent. The benchmark Hang Seng Index rose 0.1 percent.
Australia’s upper house of parliament passed legislation today that will see about 500 companies charged A$23 ($23.80) a metric ton for their emissions starting in July 2012. CLP said on Aug. 26 the legislation may impair the value of its A$1.7 billion Yallourn brown-coal power plant in Victoria state.
“With increased costs in the future after the legislation comes into effect, an impairment to the generation asset at Yallourn will be made,” CLP said today in a statement to the Hong Kong stock exchange. “The financial results of CLP Holdings for 2011 are expected to be adversely impacted.”
The Yallourn plant is operated by unit TRUenergy Holdings Pty, which also owns the Tallawarra gas-fired power plant in New South Wales state.
CLP expanded overseas to counter curbs by the Hong Kong government on returns from its power business. The utility paid A$2.2 billion in March for electricity assets in New South Wales to gain customers in the country’s most populous state. First- half earnings from its Australian energy business more than doubled from a year earlier to HK$1.2 billion ($154 million).
Full-year profit may rise to HK$10.9 billion from HK$10.3 billion in 2010, according to the mean estimate of 15 analysts in a survey compiled by Bloomberg.
--Editors: Keith Gosman, Baldave Singh.
To contact the reporter on this story: Ryan Woo in Singapore at Rwoo5@@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs