CLP : A Snapshot of CLP in 2018

ASnapshot of CLP in 2018

About CLP Group

We are an investor and operator in the energy sector of the Asia-Pacific region. For more than 100 years, we have powered Hong Kong's dynamic and spectacular growth and we continue to deliver a highly reliable supply of electricity to over 80% of the city's population. Today, our business has expanded to Mainland China, India, Australia, Southeast Asia and Taiwan. Where we operate, we become part of the social and economic fabric of the local communities, working together with them to achieve sustainable growth.

CLP's business comprises over 15,800 kilometres of transmission and distribution lines, energy retail activities that serve about 5.15 million electricity and gas customer accounts, and a diversified portfolio of generation assets across five Asia-Pacific markets, using coal, gas, nuclear, wind, hydro and solar. In addition to generation facilities where we hold equity interests, our portfolio includes long-term capacity and energy purchase arrangements.

As at 31 December 2018, our equity generation capacity that was in operation and under construction stood at 19,108MW, while our long-term capacity and energy purchases amounted to 4,597MW. Among them,

renewable energy accounted for 2,387MWand 652MWrespectively.

Datong

Shuangliao I & II

Changling II

Lingyuan

Qian'an I & II

Qujiagou

Panshan

Mazongshan

Sanhe I & II

Dongying Hekou

Suizhong I & II

Weihai I & II

Lijin I & II

MAINLANDCHINA

Zhungeer II & III

Rongcheng I, II & III

Zhanhua I & II

Penglai I

CLP Laizhou I & II

Heze II

Huadian Laizhou I

Jinchang

Liaocheng I

Sihong

Samana I

Shiheng I & II

Huai'an

Laiwu I, II & III

Samana II

PSDC

Chongming

Jiangbian

Daya Bay

Mahidad

DaliYang_er

Huaiji

Nanao II & III

Jhajjar

Yangjiang

Bhakrani

Xicun I & II

Ho-Ping

Chandgarh

Sipla

Xundian I

TAIWAN

Tejuva

Sandu I

Gale

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Fangchenggang I & II

Khandke

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Jath

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THAILAND

Veltoor

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Theni I

India

Theni II

HONGKONG

MainlandChina-Shenzhen

Hong Kong

WENT

AUSTRALIA

Branch Line

Black Point

NewTerritories

Wilga Park

Mount Piper

Castle Peak

CLP Power

Narrabri

Penny's Bay

Hong Kong

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Kowloon

Hallett

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EnergyAustralia

Yallourn

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Jeeralang

Generation

Other Energy-related Business

Coal

Gas

Nuclear

Wind

Transmission

Customer Service

Assets wholly or majority-owned by CLP

& Distribution

Other

Hydro

Solar

Other

Network

Assets in which CLP has no majority shareholding

1A Snapshot of CLP in 2018

Financial Highlights

Group operating earnings increased 5.1% to HK$13,982 million driven by higher earnings from Australia and Mainland China partially offset by lower permitted rate of return in Hong Kong since October; total earnings decreased 4.9% to HK$13,550 million.

				Increase /		Revenue
				(Decrease)
						HK$M
	2018	2017		%
					100,000
For the year(in HK$ million)
Revenue	40,872				80,000
Hong Kong electricity business		39,485		3.5	60,000
Energy businesses outside Hong Kong	49,793	52,101		(4.4)
Others	760	487			40,000
Total	91,425	92,073		(0.7)	20,000
Earnings
Hong Kong electricity business	8,558	8,863		(3.4)	0
											2014			2015			2016			2017			2018
Hong Kong electricity business related 1	227	335
										Hong Kong
Mainland China	2,163	1,238		74.7
										Australia
India	572	647		(11.6)
										Others
Southeast Asia and Taiwan	162	160		1.3
Australia	3,302	2,738		20.6
						Total Earnings
Other earnings in Hong Kong	(92)	(65)
Unallocated net finance costs	(54)	(2)				HK$M
Unallocated Group expenses	(856)		(607)
					16,000
Operating earnings	13,982	13,307		5.1
					14,000
Items affecting comparability	18				12,000
Property revaluation		369			10,000
Impairment provision	(450)		-		8,000
Reversal of tax provision	-		573		6,000
Total earnings	13,550		14,249	(4.9)	4,000
Net cash inflow from operating activities	23,951	24,417		(1.9)	2,000
					0
At 31 December(in HK$ million)					(2,000)2014 2015 2016 2017 2018
Total assets	230,514	228,151		1.0						Operating earnings
Total borrowings	55,298	57,341		(3.6)						Items affecting comparability
Shareholders' funds	109,053	108,697		0.3						Total earnings
Per share (in HK$)	5.36
Earnings per share		5.64		(4.9)		Operating Earnings
Dividends per share	3.02	2.91		3.8		(Before Unallocated Expenses)
Shareholders' funds per share	43.16		43.02	0.3		by Asset Type

Ratios

Return on equity 2(%)	12.4	13.8
Net debt to total capital 3(%)	25.5	27.8
EBIT interest cover 4(times)	10	11
Price / Earnings 5(times)	17	14
Dividend yield 6(%)	3.4		3.6

Notes:

1Hong Kong electricity business related includes PSDC, Hong Kong Branch Line and sales to Guangdong from Hong Kong

2Return on equity = Total earnings / Average shareholders' funds

3Net debt to total capital = Net debt / (Equity + advances fromnon-controlling interests + net debt). Debt = Bank loans and other borrowings. Net debt = Debt - bank balances, cash and other liquid funds.

4Earnings before interest and taxes (EBIT) interest cover = Profit before income tax and interest / (Interest charges + capitalised interest)

5Price / Earnings = Closing share price on the last trading day of the year / Earnings per share

6Dividend yield = Dividends per share / Closing share price on the last trading day of the year

1%

		2%	32%
		28%				2018
49%
	59%	7%					2017
		4%

11%

7%

Coal and gas Nuclear Renewable

Transmission, distribution and retail Others

A Snapshot of CLP in 2018

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Responding to climate change

Harnessing the power of technology

We embrace the opportunities

Reinforcing cyber resilience and

Our

Growing our business with purpose

We create value for shareholders, customers, employees, communities and the environment based on our purpose-led approach to deliver

We aim to address the enormous challenges associated with climate change while keeping our business sustainable to power economic growth.

inherent within the digital evolution, and continually refresh our operations, products and services capturing the latest in innovation, efficiency and customer convenience.

data protection

We focus on investing in people and resources to manage the increasing scale and severity of cyber security risks.

Building an agile, inclusive and sustainable workforce

We maintain a workforce with the skills, mindset and agility to thrive in

material topics

what will shape our prospects

reliable, affordable and sustainable energy.

Our governance

how we hold ourselves accountable

Good corporate governance is a key

enabler of long-term value creation, which enhances

our credibility and safeguards the interests of our stakeholders. We remain committed to doing the right thing at all times, and to embedding a corporate governance framework that our stakeholders respect and understand.

an ever-changing operating environment.

3

A Snapshot of CLP in 2018

4

A Snapshot of CLP in 2018

How CLP Creates Value for Stakeholders How CLP Creates Value for Stakeholders

2018 In Figures

At CLP, we utilise a range of capitals, which represent stores of value that can be built up, transformed or depleted in the production of goods or services, to create value for shareholders, customers, employees and the wider community. The following diagram shows the key capitals we

used and the value we created for different stakeholders in 2018.

				s
			t
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I
					Social &
		Human Capital			Relationship
					Capital
		7,634employees

					Operating Ear
							nin
					HK$	13,982	million	gs
			Value		Create
						d
					ValueCreat
					for Sta		ed
						keholde
		K	$91,425 million					rs
	nue of H
ding	reve
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		g
HK$	13,550	s	Divi	d	n
		million		e		d
			HK$			s
			7,630		million

Ec
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	V
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R			e
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HK$	d
14,374	million

Financial Capital		Volunteering
		23,661hours
Shareholders' Funds		by CLP staff and
HK$ 109,053million		family members
Total Borrowings
HK$ 55,298million	Natural
	Capital	Intellectual
	Fuel Use
	Coal	Capital
Manufactured	521,568 TJ	•Research and
	Gas	development
Capital	83,359 TJ	•Innovation and
19,108equity MW		technology

of generation capacity

Customers

About5.15million customer accounts including 2.60 million in Hong Kong and 2.55 million in Australia

Electricity Sent Out

92,333million kWh

Equity basis as well as long-term capacity and energy purchase arrangements

Australia 22%

Southeast Asia
& Taiwan 2%	Sent Out	Hong Kong 39%
India 9%

Community	Environment
695programmes
	Equity basis as well as long-term	Government
initiated or supported
	capacity and energy purchase	& Regulators
Directly benefitted over	arrangements	Current Income Tax
730,000 peopleand			Capital
	Carbon Intensity	HK$ 3,565million
430organisations	0.66kg CO2/kWh		Providers
Donations	Non-carbon Emitting Energy		Shareholders:
HK$ 18million			Total Dividends
	5,724 MW
			HK$	7,630million
	24.1% of CLP's portfolio
	Renewable Energy	Suppliers &	HK$	3.02per share
	3,039MW	Contractors	Debt Holders:
	12.8% of CLP's portfolio		Finance Costs
		Fuel and Other Operating Costs	HK$	2,107million

4,597MWof long-term capacity and energy purchase arrangements

											Nuclear 11%
											Wind 9%
Equity and
											Hydro 2%
Long-term Purchase
23,705 MW											Solar 2%
											Gas 21%
											Others 4%
											Coal 51%

Note: Figures include rounding adjustments

Over 15,800kmof transmission and high voltage distribution lines, and

14,917primary and secondary substations in Hong Kong

HK$12,045million of SoC

and other capex

Mainland China 28%

Over99.995% supply reliability in Hong Kong

Unplanned customer minutes lost in Hong Kong

(average of the past 3 years)

1.44minutes(excluding Typhoon Mangkhut)

10.29minutes(including Typhoon Mangkhut)

Employees

HK$ 60,791million

Staff Expenses

HK$ 4,449million

2018 Annual Report	2018 Sustainability
	Report

A Snapshot of CLP in 2018

5

A Snapshot of CLP in 2018

6