Steady Overall Operation Supported by
Gradual Recovery in Traffic Volume and Toll Revenue
Grasping Strategic Development Opportunities to
Promote Interactions of Three Platforms
Financial Highlights:
For the six months ended 30 June | 2022 | 2021 | Changes |
Revenue (RMB ’000) | 1,615,538 | 1,831,743 | -11.8% |
Profit attributable to shareholders (RMB ’000) | 295,318 | 467,699 | -36.9% |
Basic earnings per share (RMB) | 0.1765 | 0.2795 | -36.9% |
Interim dividend per share (HK$) | 0.10 | 0.20 | -50.0% |
Interim dividend payout ratio | 48.8% | 59.5% | Down 10.7 percentage points |
(9 August 2022 – Hong Kong) Yuexiu Transport Infrastructure Limited (“Yuexiu Transport Infrastructure” or “Company”; stock code: 1052) announced its interim results for the six months ended 30 June 2022.
1. Stable overall operation demonstrating resilience and potentials
During the first half of 2022, while the COVID-19 pandemic became increasingly complex and severe in both the PRC and internationally, and with such pandemic creating significant and increasing downward pressure on the economy in the second quarter – such pandemic was largely brought under control via various effective pandemic control measures in the PRC. In turn, such measures led to a steady recovery in the PRC national economy and increased stability in the society. In the first half, the COVID-19 pandemic affected various cities in the country. Strict lock downs or control measures were implemented across the PRC and restrictions were imposed on the movement of personnel and logistics. The COVID-19 pandemic affected the PRC’s overall economy as well as toll revenue and traffic volume. As such, the average daily toll revenue and daily traffic volume of various projects under the Company saw year-on-year declines.
Fortunately, the PRC governmental responses played a significant role in dealing with such impact . The impact of pandemic control on logistics across the PRC was mitigated by measures such as releasing a circular to require work to be conducted to achieve smooth freight and logistics, resolution of road closure and blockage, and smooth operation of main traffic lines, which helped improve the adverse impact of pandemic control on truck traffic volume. The Policy Measure Package to Stabilise the Economy was introduced to mitigate the impact on socio-economic development by the COVID-19 pandemic. From May to June 2022, with the pandemic gradually coming under control, control measures were eased accordingly, and the effect of the economic stabilisation measures started to show. As a result, the average daily toll revenue and average daily toll traffic volume of projects under the Company improved. The average daily traffic volume and toll revenue in May increased by 18.0% and 12.3% month on month respectively, while in June they increased by 20.9% and 4.4% month on month respectively, fully demonstrating the Company’s resilience and potentials in its operation. Furthermore, in May 2022, the international credit rating agency Fitch Ratings upgraded the Company’s rating to “BBB” from “BBB-” for the first time, with a “stable” outlook, reflecting the agency’s recognition of the Company’s stable operation and sustainable development.
During the period, the Company recorded revenue of RMB1.616 billion, representing a year-on-year decrease of 11.8%. Profit attributable to shareholders was RMB0.295 billion, representing a year-on-year decline of 36.9%. The Board of directors has recommended the payment of an interim dividend of HK$0.1 per share, while the interim dividend payout ratio is approximately 48.8%. The dividend payout fully reflects that the Company has always shared its profits with its shareholders immediately, which is a practice in line with the Company’s dividend policy.
2. Implementing various measures to achieve lower costs and higher efficiency
In response to the unfavorable macro environment, the Company is committed to fulfilling the national requirements of “preventing COVID-19 outbreak, stabilising the economy, and ensuring safety in development”, while formulating and actively implementing various economic stabilisation measures to fully support the normal operation of its projects. It also strived to ensure the safe and smooth operation of highways and promote the stable operation of industry chains and supply chains.
While greatly contributing to pandemic control, the Company took active approaches to its operation to minimise the adverse impact through implementing various measures to reduce costs and increase efficiency. On one hand, the Company strictly controlled project costs and strengthened project management and control; on the other hand, it optimised its debt structure and flexibly utilised various financing tools to continuously reduce its comprehensive financial costs. According to the data, the Company’s overall weighted average interest rate in the first half of 2022 was 3.78%, down 0.23 percentage point as compared with the same period in 2021.
3. Optimizing the three platforms to promote cross-platform interactions
Going forward, the Company will continue to capitalise on opportunities brought by policies of the public offering of infrastructure REITs, and adhere to improving the integrated business model of “investment, financing, management and exit” on an ongoing basis. The Company will further leverage the positive role of publicly offered REITs and the positive interaction between publicly offered REITs and listed companies to achieve asset inflow and outflow, so as to further optimise the Company’s asset portfolio and create greater value for shareholders.
During the 14th-Five-Year Period, the Company will firmly grasp the strategic opportunities for expressway investment and mergers and acquisitions. Gaining a foothold in the Guangdong-Hong Kong-Macao Greater Bay Area and covering the regions benefiting from urbanisation process and rapid industrialisation development, with full utilisation of interaction model of its three platforms, the Company continues to strengthen and expand its infrastructure business, with a particular focus on toll roads. The Company disclosed the potential acquisition of Lanwei Expressway in the results announcement published on 9 March 2021. The relevant studies are underway. During the year, the Company also studied other potential acquisition targets, without formally entering into any agreements in respect of any potential acquisitions. Furthermore, the Company actively explored investment opportunities in existing projects for reconstruction and expansion. The traffic volume of the GNSR Expressway has become substantially saturated. In order to cater for more traffic requirements, the Company is commencing preliminary assessment work for its reconstruction and expansion. The Board will make relevant announcements in accordance with the progress of reconstruction and expansion as and when appropriate.