GZI Transport Announces its 2009 Annual Results
Revenue Reached HK$1.14 billion, a Record-High since Listing
(Hong Kong, 16 March 2010)…GZI Transport Limited (“GZI Transport” or the “Company”) (Stock Code: 1052) announced today the annual results of the Company and its subsidaries (the “Group”) for the 12 months ended 31 December 2009 (the “Year”).
Revenue of the Group for the Year increased significantly by 12.0% as compared to 2008 to HK$1.14 billion, which was a record high since its listing in Hong Kong. Profit attributable to equity holders of the Company amounted to HK$434 million (2008: HK$608 million). Basic earnings per share for the year amounted to HK$0.260 (2008: HK$0.363). If excluding the impairment losses on intangible operating rights of approximately HK$170 million, the operating profit would have been HK$650 million, or 11.9% higher as compared to 2008.
The Board has recommended the payment of a final dividend for 2009 of HK$0.12 (2008: HK$0.08) per share. Together with the interim dividend of HK$0.04 (2008: HK$0.08) per share, total dividends for the Year will have a dividend payout ratio of 61.5 % (2008: 44.1%).
In view of the record-high yearly revenue since the Company’s listing in Hong Kong, Mr Zhang Zhaoxing, Chairman of GZI Transport said, “Notwithstanding that the operations / revenues of some of the Class I highways were negatively affected by the financial turmoil and a difficult economic environment in the Pearl River Delta in the first half-year, we succeeded in registering double-digit growth in revenue for the whole year, thanks to a sharp rise of revenue in the second half-year. This is primarily owing to strong toll revenue growth from the Guangzhou Northern Second Ring Expressway (“GNSR Expressway”) and new revenue contribution from Cangyu Expressway and Jinbao Expressway.”
In the second half-year, the Pearl River Delta benefitted from the economic recovery and the economic stimulation policies. Hence, the Company’s mature projects like GNSR Expressway, Guangzhou Western Second Ring Expressway (“GWSR Expressway”), Humen Bridge and Shantou Bay Bridge gained significant growth in traffic volume. Qinglian Expressway recorded exponential growth in toll revenue as it started to collect toll fees based on expressway rates and in accordance with the Toll-by-Weight Standards from the beginning of the second half-year.
During the Year, the average daily traffic volume and toll revenue of GNSR Expressway were 87,636 vehicles/day and RMB1,686,712/day respectively, representing increases of 10.5% and 25.2% over 2008 respectively; the average daily traffic volume and toll revenue of GWSR Expressway were 14,762 vehicles/day and RMB471,014/day respectively, representing increases of 56.5% and 56.2% over 2008 respectively; the average daily traffic volume and toll revenue of Cangyu Expressway were 3,432 vehicles/day and RMB121,691/day respectively; the average daily traffic volume and toll revenue of Jinbao Expressway were 19,917 vehicles/day and RMB427,591/day respectively; and the average daily traffic volume and toll revenue of Qinglian Expressway were 15,841 vehicles/day and RMB825,366/day respectively.
In 2009, the Group acquired a 90% equity interest of the project company operating Cangyu Expressway and a 60% equity interest of the project company operating Jinbao Expressway. The acquisitions led to an increase of the proportion of expressways among the Group’s total assets to 68.7% (2008: 57.8%). Over the last five years, the Group’s share of toll revenue from expressways has been on the rise. The Group will adhere to its investment strategies and step up investment in quality toll roads by deploying its strong capital resources (the Group had cash and bank balance of HK$2.22 billion as at 31 December 2009). The Group will also consider investing in other infrastructure projects.
During the Year, Yue Xiu Property Company Limited, the former controlling shareholder, completed a restructuring exercise and as a result, Yue Xiu Enterprises (Holding) Limited became the Company’s controlling shareholder. Subsequently, the Company’s board of directors was simplified and the number of directors was reduced from 15 to 9. The Group also succeeded in reinforcing project investment, operations management, project cost control, internal audit and risk control as well as capital market management, thereby lifting the standards of corporate governance.
Looking ahead, Mr Zhang said, “We expect a stable expansion of GZI Transport’s toll road operation. It is expected that GNSR Expressway, Humen Bridge, Northern Ring Road, Shantou Bay Bridge, Xian-Lintong Expressway and Jinbao Expressway will continue to generate solid profits for the Group. New projects like Qinglian Expressway, GWSR Expressway and Cangyu Expressway will become the Group’s new profit drivers when their respective road networks become more sophisticated and offer better connectivity. Moreover, the hosting of the Asian Games in November 2010 is expected to favor the Group’s toll road operation because our projects in the area mainly comprise city ring roads and intra-city highways which connect transport hubs such as Guangzhou Baiyun Airport.”
Mr. Zhang added, “The Group is tracking closely a number of regions in the PRC with relatively mature economic development. These regions mainly include the Pearl River Delta, western provinces benefiting from the China-ASEAN Free Trade Area, the Bohai Rim and the central region which offers new growth opportunities rendered by the service of the Wuhan-Guangzhou High-speed Railway. We aim to expand the Group’s operating scale and generate ever-increasing return for shareholders, pushing forward our corporate development to a new stage.”
Profile of GZI Transport Limited
The Group is mainly engaged in investment, operation and management of toll expressways, national highways and bridges mainly located in Guangdong Province. As at 31 December 2009, the Group had 13 toll road and bridge projects which it invests in and operates, with an attributable length of approximately 331.7 km. These projects include Guangzhou City Northern Ring Road, Guangzhou City Northern Second Ring Expressway, Guangzhou Western Second Ring Expressway, Guangdong Humen Bridge and Shantou Bay Bridge; inter-province transportation projects such as Guangshen Highway, Guangshan Highway, Guangcong Highway II, Guanghua Highway and Qinglian Expressway, all of which connect the transportation hub in Guangzhou City with Guangdong, Hunan and Jiangxi provinces; Xian-Lintong Expressway in Shaanxi Province; Canyu Expressway in Guangxi Province; and Jinbao Expressway connecting Tianjin and Hebei Province. All of these projects have been in operation and collecting toll fees.