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Yuexiu Transport Infrastructure Announced 2020 Interim Results

Date: 2020-08-19
View Count: 67

The Company gets through difficult operating environment

 with strong financial position

Business of toll roads and bridges resumes growth  

 

 Yuexiu Transport Infrastructure Announced 2020 Interim Results


Financial Highlights:

For the six months ended 30 June

2020

2019

Change

Revenue (RMB ’000)

839,590

1,380,910

-39.2%

(Loss)/profit attributable to:

Shareholders (RMB ’000)

(288,121)

635,070

 

Yuexiu Transport Infrastructure Limited (“Yuexiu Transport Infrastructure” or the “Company”; stock code: 1052) announced its 2020 interim results on 19th August 2020.

 

In the first half of 2020, the coronavirus pandemic raged in the entire world. Many countries are fighting very hard battles against the disease which has not yet shown any signs of abating. Their stringent measures to prevent and control the pandemic have dealt a heavy blow to the global economy. The toll road industry bore the brunt of the fall in toll revenue caused by the anti-pandemic measures and the government’s toll-free policy. For the six months ended 30 June 2019 (the “period under review”), the Company’s revenue decreased by 39.2% year on year to RMB8.4 million. The Company also recorded a loss during the period in contrast to a profit attributable to shareholders in the same period last year.

 

In China, COVID-19 pandemic has been brought under control. On the back of the gradual resumption of work and production, the country’ economy has also been returning to normal. The latest statistics have also fully demonstrated the resilience of China’s economy amid the pandemic. In the second quarter of 2020, the transportation industry has been recovering in terms of some key performance indicators thanks to the resumption of work and production. In June 2020, growth in the overall freight volume in the country returned to a normal level, reflecting the transportation sector’s robustness.  

 

Mr. Li Feng, Chairman of Yuexiu Transport Infrastructure, said, “In the first half of 2020, the Company provided prompt reaction and well organized precautionary measures put in place against the outbreak of Covid-19 to underpin normal operation. As economies reopen steadily, major projects showed, under strengthened marketing promotion, a positive growth momentum since the toll collection resumed. Liquidity safety and financial stability were underpinned by strengthened control and management of cash and funding. We also strengthened costs and expenses control, striving for financial, taxation and monetary support, and optimized restructuring of debts and reduced financial costs. The Company has resumed toll collection since 6 May 2020, nearly all the operating performances of all its subsidiaries have returned to the levels before the outbreak of the pandemic. Even our toll roads in Hubei province, which were subject to the most stringent quarantine measures when the pandemic was at its height, has rapidly returned to normal in terms of operating performance. Some of the Company’s other toll roads and bridges even recorded growth in toll revenue. Yuexiu Transport Infrastructure remains optimistic about the prospect for investment in and development of expressways. It will further develop the markets in such an economically vibrant region as Guangdong-Hong Kong-Macao Greater Bay Area and in the provinces in central China, which have considerable potential for economic growth because they benefit from the reallocation of industries there from more economically advanced areas. We will keep seeking opportunities for acquisition of high-quality toll roads and, at the same time, pay attention to opportunities for the reconstruction and expansion of existing toll roads and bridges. Aspiring to become a company with strong capabilities for investment, financing and managing assets in the transportation infrastructure sector for sustainable development, Yuexiu Transport Infrastructure applies the concept of “asset management” to its core business of operating toll roads and bridges, and tries to innovate the business model for such business. This is aimed at generating consistent, stable returns to shareholders.”

 

The Company adopts and implements prudent financial policies. It completed the acquisition of three expressways in Hubei province in the fourth quarter last year. This resulted in an increase in the overall gearing ratio. The Company coordinated the deployment of its domestic and offshore financial resources and leveraged the cross-border financing platforms between mainland China and Hong Kong to optimize its debt structure, reduce its financing costs and ensure both sufficient liquidity and financial stability. Such moves have enabled the Company to withstand the impact of the COVID-19 pandemic and the government’s free-toll policy. Both domestic and foreign credit rating agencies have conducted full assessments of the Company and then maintain their investment grade credit rating of the Company. Going forward, the management will still adhere to a prudent financial policy and continue to strike a balance between business expansion and financial security.

 

The China Securities Regulatory Commission issued the “Guidelines for the Public Offering of Infrastructure Securities Investment Funds (Trial)” (《公開募集基礎設施證券投資基金指引(試行)》)on 7 August 2020, which marks the formal legal support of the domestic infrastructure public offering REITs pilot program. The Company will actively carry out research and discussion work and promote the development of our core business towards high-quality development phase.


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