Datang Power Posts Third-Quarter Loss on Higher Costs

By Wang Ying and Kyunghee Park

Oct. 26 (Bloomberg) -- Datang International Power Generation Co., the biggest Chinese power producer listed in Hong Kong by market value, posted a third-quarter loss because of rising coal costs and state caps on electricity tariffs.

The company had a loss of 432.9 million yuan ($63 million), or 0.037 yuan a share, Datang Power said in a statement to the Hong Kong stock exchange today, without providing year-ago figures.

The power producer said in a separate statement it expects full year net income will likely drop about 85 percent from last year's 3.41 billion yuan because of rising fuel costs. First-half profit fell by 77 percent to 406.2 million yuan, the company said in August.

To help narrow generators' losses and ease China's power shortages, the government raised the price of electricity sold to grid operators by 6 percent starting Aug. 20, the second tariff increase this year. The adjustment wasn't enough to offset rising coal costs.

Datang produced 96.4 billion kilowatt-hours of electricity in the first nine months, 11 percent more than a year earlier, the company said on Oct. 13.

Datang Power's shares fell 29 percent between June and September in Hong Kong trading, compared with a 27 percent decline in the benchmark Hang Seng Index. The stock slid 1.8 percent to close at HK$2.79 on Oct. 24.

China Datang Corp., the parent of Datang Power, may miss its full-year output target because of slowing demand growth and delays in expansion, the Beijing-based company said Oct. 17.

Rival Huaneng Power International Inc., a unit of China's biggest power producer by capacity, on Oct. 21 posted a third- quarter loss of 2.2 billion yuan because of higher fuel costs, and forecast a full-year loss.

To contact the reporter on this story: Wang Ying in Beijing at wang30@bloomberg.net;