Demand for power puts profits up

SHANGHAI Electric Group Co, China's biggest maker of power equipment by sales, said yesterday that first-half profit increased 50 percent.

The result came as power plants ordered more generators to meet greater demand for electricity, Bloomberg News reported.

Net income jumped to 1.76 billion yuan (US$232 million), or 0.148 yuan a share, from last year's 1.17 billion yuan, or 0.0987 yuan a share, the company said in a statement to the Hong Kong Stock Exchange.

Sales rose 22 percent to 25.85 billion yuan.

Shanghai Electric benefited as higher demand for power in the world's fastest-growing major economy prompted electricity suppliers to expand production capacity.

The country's economy expanded at its fastest quarterly pace in 12 years from April to June, spurring electricity use in factories and homes.

Sales of power-generation equipment, the company's biggest segment, rose 18 percent to 15.5 billion yuan in the first half of this year.

The company said on April 16 that it expects more contracts as China speeds the construction of larger, more efficient power stations to replace smaller, more polluting ones.

Shanghai Electric is developing 1,000-megawatt nuclear- and thermal-power equipment to tap rising demand from a Chinese government mandate to close small power stations and replace them with larger-capacity plants, it said in yesterday's statement.

Asia's second-biggest economy had blackouts in some regions last year as economic growth strained electricity supplies.

Shanghai Electric and smaller rivals Dongfang Electrical Machinery Co and Harbin Power Equipment Co increased output by a fourth last year to fill orders, the Beijing-based National Development and Reform Commission said on February 2.

Shanghai Electric shares were unchanged yesterday, closing at HK$3.51 (45 US cents) on the Hong Kong exchange before earnings were announced. The stock has gained 7.3 percent this year.