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GZI Transport Announces its 2009 Interim Results

Date: 2009-08-26
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 GZI Transport Announces its 2009 Interim Results

Toll Revenues Grow in General, Proportion of Expressways Expands Further

(Hong Kong, 25 August 2009)…GZI Transport Limited (“GZI Transport” or the “Company”) (Stock Code: 1052) and its subsidiaries (the “Group”) announced today the unaudited results for the 6 months ended 30 June 2009 (“Period”).


During the Period, operating revenue of the Group amounted to HK$507 million, representing an increase of 2.7% over the corresponding period last year. Operating profit amounted to HK$327 million, an increase of 11.2% year-on-year. However, mainly due to an impairment provision of HK$172 million on intangible operating rights for certain Class I highways operated by the Group, profit before tax decreased by 41.6% year-on-year to HK$254 million. Profit attributable to equity holders of the Company amounted to HK$176 million (2008 interim: HK$330 million). Basic earnings per share amounted to HK$0.1053 (2008 interim: HK$0.1972). The board of directors of GZI Transport has resolved to declare an interim dividend for 2009 of HK$0.04 (2008 interim: HK$0.08) per share.


Mr. Zhang Zhaoxing, Chairman of GZI Transport, said, “In spite of the impact of the global financial crisis and the continuous implementation of the “green channel” toll-free policy, the expressways of the Group maintained growth in average daily toll traffic volumes and average daily toll revenues in general (excluding Northern Ring Road and Humen Bridge) with the domestic economic stimulus policy having gradually proved effective. Meanwhile, the proportion of expressway projects in the Group’s assets has been further increased upon completion of the acquisition of 90% equity interests in Cangyu Expressway in early-2009. The proportion of revenues from expressways and bridges in total revenue has been increased to 90%. As the Group actively increases its investment in expressways, the proportion of toll revenue from Class I roads will further decrease.”


The Group has lost operating profit contributions from Guangcong Highway I and Xiang Jiang Bridge II due to the cessation of their toll operating rights since 1 January 2009. However, with an one-off gain on disposal of assets of approximately HK$65.9 million and profit contributions from Guangzhou Northern Second Ring Expressway (“GNSR Expressway”) and from the newly acquired Cangyu Expressway, operating profit (before impairment losses on intangible operating rights) of the Group increased by 11.2% over the same period last year.


During the Period, both traffic volumes and toll revenues of expressways operated by GZI Transport posted considerable growth in general. In particular, the average daily traffic volumes of GNSR Expressway, Xian Expressway, Shantou Bay Bridge and Guangzhou Western Second Ring Expressway (“GWSR Expressway”) increased by 5.8%, 7.9%, 2.0% and 23.4%, respectively, over the same period last year; while their average daily toll revenues increased by 15.9%, 7.8%, 3.0% and 32.2%, respectively, over the same period last year. Cangyu Expressway, of which the acquisition was completed in early-2009, recorded satisfactory results with its average daily toll revenue amounting to approximately RMB76,713. Meanwhile, the under-constructed Qinglian Class I Highway became fully operational in the first half of 2009, thereby resulting in increases of its average daily traffic volume and average daily toll revenue by 154.3% and 277.8%, respectively, over the same period last year.


Humen Bridge suffered from decreases in traffic volume and toll revenue during the Period as it was impacted by the closure of many factories in the Pearl River Delta (“PRD”) amidst the financial crisis. However, its operating performance is expected to improve under a continued improvement in economic conditions of the PRD. Meanwhile, Northern Ring Road has imposed a travelling ban on non-local trucks above 5 tons, causing a year-on-year decrease in traffic volume of trucks above Type V. Together with a temporary closure of certain road sections due to the construction of the Wuguang Railway, the average daily traffic volume and average daily toll revenue of Northern Ring Road dropped slightly by 1.9% and 8.7% respectively.


Looking ahead, Mr. Zhang said, “In the second half of 2009, GZI Transport will still have to confront some potential adversities: certain sections of the Northern Ring Road will be closed for a major overhaul in order to welcome the Asian Games in Guangzhou, and traffic diversion effect will be brought to Xian Expressway by a neighboring trunk expressway. However, projects including GNSR Expressway and Shantou Bay Bridge have shown good development trends while projects such as GWSR Expressway is expected to be among growth drivers of the Group in the future. In addition, the Hekou-to-Pingtai section of Guangwu Expressway, which connects with Cangyu Expressway, is expected to be opened to traffic, thereby further increasing the traffic volume of Cangyu Expressway.”


Mr. Zhang added, “Guangdong Province plans to invest RMB220 billion to expand its expressway network from 3,520km to 5,500km during 2008 to 2012, providing much room for investment for GZI Transport, This augurs well for the Group’s strategy of increasing the proportion of expressways. Meanwhile, the Group has been closely monitoring economic hotspots including the Pan-Bohai region and Central and Western regions, as well as actively seeking investment opportunities of expressway projects which are relatively mature and with considerable growth potential within those regions. Given that China has been increasing its investments in infrastructure projects in recent years, the Group also pays close attention to investment opportunities of large-scale projects such as ports and terminals, so as to further improve the Groups’ investment portfolio and create greater value for shareholders.”



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 30 June 2009, the Group had 12 toll road and bridge projects which it invests in and operates, with an attributable length of approximately 317.3 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, Qinglian Highways and Cangyu Expressway all of which connects the transportation hub in Guangzhou City with Guangdong, Hunan and Jiangxi provinces; and Xian-Lintong Expressway in Shaanxi Province. All of these projects have been in operation and collecting toll fees.


~The End~


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