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UPDATE 1-CLP expects A$245 mln carbon-related impairment loss

HONG KONG Dec 13 (Reuters) – Regional power utility CLP Holdings Ltd said it will write down the value of carbon-emitting assets in Australia, resulting in an expected impairment loss of A$245 million ($247.13 million) due to a new carbon tax law.

Australia’s parliament last month passed landmark legislation to impose a A$23 per tonne tax on carbon emissions for 500 of the nation’s biggest polluters across mining, energy and heavy manufacturing from mid-2012.

Hong Kong-based CLP said in a statement on Tuesday that it had completed a study on the impact of the legislation on its Australian unit TRUenergy, and would have to write down the value of the unit’s coal facility in Yallourn, Victoria, by A$350 million, the company said in a statement.

The writedown would result in a loss that would be recognised in its books this year, it said.

“No further writedowns within the TRUenergy portfolio are required as a result of the passing of the Clean Energy legislation,” the company said.

Analysts had expected a writedown of as much as $772 million because of the new law.

“The new carbon tax in Australia will significantly impact the long-term profitability of this plant,” said CLSA analyst Rajesh Panjwani in a report released on Monday, adding that the coal facility accounted for 17 percent of the power utility’s net worth.

TRUenergy is one of Australia’s largest integrated energy companies, providing gas and electricity to more than 2.5 million households and business customers. TRUenergy owns and operates a 5,469 megawatt (MW) portfolio of electricity generation facilities.

Analysts expect the Australian carbon legislation to have a limited impact on the company in the near term, as the new law allows CLP to claim up to A$1.5 billion in cash compensation and free carbon permits, which could boost earnings at TRUenergy by 15 percent yearly before interest, taxes, depreciation and amortisation (EBITDA) from 2013 to 2015.

But there would be less predictability after the first three years as Australia ended the cash incentive and introduced a carbon-trading scheme under which the market would determine the price of carbon, said analysts. ($1 = 0.9914 Australian dollars) (Editing by Chris Lewis)

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