Profit And Loss Account |
|
| (Unaudited) |
|
| Six months ended 30th June |
|
|
| 2001 |
|
| 2000 |
|
|
| HK$’000 | |
| HK$’000 |
|
|
|
| |
|
|
|
| Turnover |
| 214,169 |
|
| 231,304 |
|
| Cost of sales |
| (68,765)
 |
|
| (68,128)
|
|
|
|
|
|
|
|
|
| Gross profit |
| 145,404 |
|
| 163,176 |
|
| Other revenues |
| 16,310
|
|
| 24,034 |
|
| Administrative expenses |
| (17,131) |
|
| (19,570) |
|
| Other operating expenses |
| (3,375)
|
|
| (3,239)
|
|
|
|
|
|
|
|
|
| Operating profit |
| 141,208 |
|
| 164,401 |
|
| Finance costs |
| (24,547) |
|
| (27,898) |
|
| Share of profits of associated companies |
| 70,179
|
|
| 76,189
|
|
|
|
|
|
|
|
|
| Profit before taxation |
| 186,840 |
|
| 212,692 |
|
| Taxation |
| (15,131)
|
|
| (15,492)
|
|
|
|
|
|
|
|
|
| Profit after taxation |
| 171,709 |
|
| 197,200 |
|
| Minority interests |
| (39,247)
|
|
| (51,460)
|
|
|
|
|
|
|
|
|
| Profit attributable to shareholders |
| 132,462
 |
|
| 145,740
|
|
|
|
|
|
|
|
|
| Interim dividend |
| 31,337
|
|
| 31,125
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
| 12.75 cents
|
|
| 14.05 cents
|
|
|
|
|
|
|
|
|
| Fully diluted earnings per share |
| 12.14 cents
|
|
| 13.88 cents
|
|
|
|
|
|
|
|
|
| Interim dividend per share |
| 3.00 cents
|
|
| 3.00 cents
|
|
|
|
|
|
|
|
|
Results Highlights
For the six months ended 30th June 2001, the Group’s turnover and gross profit amounted to approximately HK$214.2 million and HK$145.4 million and decreased by 7.4 per cent and 10.9 per cent respectively. The decline in turnover and gross profit were mainly the result of the lower traffic volume as affected by the construction and repairing of road networks around Guangzhou City for preparing the Ninth National Games and changes of traffic mix in certain remote regions of Guangdong Province. These factors also affected the traffic volume of some associated companies, and share of profits from associated companies decreased by 7.9 per cent to HK$70.2 million. The management expects that these unfavourable factors are just temporary in nature. Other revenues decreased from HK$24.2 million in the same period of last year to HK$16.3 million in this period due to an expected reduction of stake in other investment and termination of business tax rebate from the local government.
Administrative expenses for this period amounted to HK$17.1 million as compared to HK$19.6 million in the first half of 2000. The 12.5 per cent decline was mainly due to lower amortization cost in this period which was in line with reduction of stake in other investment. Finance costs dropped by 12.0 per cent to HK$24.5 million, and was caused by the recent decline of US dollars and HK dollars prime rates. Profit attributable to shareholders was HK$132.5 million which dropped by 9.1 per cent as compared to the same period last year. Basic earnings per share decreased accordingly by 9.3 per cent to 12.75 cents.
Future Strategy and Prospects
In the Group’s view, restriction of access by overloaded trucks as well as road construction and repairing works for preparing the Ninth National Games are temporary factors affecting traffic conditions in Guangdong Province. Various local factors will contribute to traffic volume growth of individual toll road projects in 2002. For example, completion of Tong Guan Luo Yang Expressway Section of the National Highway 310 connecting Xian City and Henan Province in late 2001 is expected to boost traffic volume of Xian Expressway. Traffic volume of Humen Bridge will experience strong growth due to additional traffic channelled by the completion of Taiyang Section of the West Coast Expressway in early 2002. GNSR Expressway, the Group’s biggest project, will be completed in October 2001 and contribute to the revenue growth. Longer term, the Group is also expected to benefit from China’s access to the World Trade Organization which will speed up economic development of China.
Guangzhou’s role as the traffic hub of Guangdong Province is increasingly important. The Group’s future strategy is to concentrate on development of expressways around the Guangzhou Hub in which the Group has extensive knowledge. The Group is conducting feasibility studies on the investment potential of the Guangzhou Eastern Second Ring Expressway and the Guangzhou Western Second Ring Expressway. On completion, these two Expressways will have significant synergy with GNSR Expressway in chanelling traffic. In terms of financing strategy, the Group will make use of non-recourse Rmb project financing as much as practicable to reduce exchange and liquidity risks.
Contact: Sophia Yan, Executive Director of Guangzhou Investment Co. Ltd. (Tel: 2116 8022 ; Fax: 2598 7688)