BECE posts $81.3 million profit in H1


The Chinese renewables developer and solar EPC contractor was operating 1.16 GW of PV capacity at 33 sites by the end of June, from 946 MW at 26 locations throughout China by the end of December 2016. Distributed-generation PV projects accounted for roughly 100 MW of its operational portfolio.

It had about 2 GW of solar capacity under development by the end of the first half of 2017, some of it in collaboration with other companies. Its current pipeline includes 46 projects throughout 11 provinces and two regions of China, including about 400 MW of distributed-generation PV capacity.

The group is most active in northern China’s Hebei province, where it was operating 252 MW of solar at nine sites by the end of June. However, it operates slightly more capacity in central China’s Henan province, but at fewer locations, with 259 MW of capacity spread across three sites. The eastern province of Anhui rounded out BECE’s top three regions for PV development, with 191 MW of capacity in operation.   

Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at HK$1.1 billion by the end of June, from just HK$139.2 million a year earlier. The group generated approximately HK$3.85 billion of revenue in the first half of this year, from about HK$617.5 million in the first six months of 2016. The results were broadly in line with a preliminary earnings forecast that it unveiled earlier this month. However, earnings from its non-core cigarette packaging business were not included in the unaudited results that it filed to the Hong Kong stock exchange this week.

BECE primarily attributed its strong performance this year to the growth of its solar and wind businesses, with revenue from its PV construction services unit accounting for roughly 79.5% of total group-wide revenue, at about HK$3.07 billion. The solar EPC business recorded a gross profit ratio of 15.2% in the first half, from 23.6% a year earlier. The group claimed that the division was working on more than 900 MW of utility-scale and distributed-generation solar capacity by the end of June.

“The group’s centralized photovoltaic power business expanded significantly through an increase in operating capacity, as a result of the acquisition of businesses from independent third parties and the development and construction of centralized photovoltaic power plants since 2015,” BECE said.

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The group’s sales of PV-generated electricity, including tariff adjustments, surged to HK$656.7 million in the first half, from just HK$7.4 million a year earlier. BECE’s operational PV projects generated about 667.05 GWh of electricity in the January-June period. Its power sales contributed to a gross profit ratio of 68.2%, from 42.8% for the division in the first half of 2016.

In addition, the group reported HK$90 million of revenue from the technical consulting services it offers to other solar developers, from just HK$31.9 million in the first six months of 2016. An operational 48 MW wind farm it recently acquired in eastern China’s Shandong province also generated HK$36.8 million of revenue.

In the year to the end of December 2016, BECE won the rights to develop 300 MW of utility-scale solar at four sites under the Chinese government’s Top Runner program, which awards solar projects to developers and suppliers with advanced technologies. By the end of June, the group had completed one of those projects — a 50 MW installation in Weishan county, Shandong province — and had started electricity generation.

“Securing centralized photovoltaic power plant projects under the Top Runner program demonstrates the comprehensive technical strengths of the group and signifies industry recognition,” BECE claimed.

However, the group — which reported a net profit of HK$529.2 million in 2016 — remains focused on both utility-scale and distributed-generation solar. In July, for example, it signed PPAs for electricity it is generating from solar arrays it has installed at water-treatment facilities owned by Beijing Enterprises Water Group (BEWG). In a statement this week, BECE vowed to continue to expand its PV power business in cooperation with BEWG in the future.

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