SHENZHEN INVESTMENT HOLDINGS BAY AREA DEVELOPMENT COMPANY LIMITED Press Release
HOPEWELL HIGHWAY INFRASTRUCTURE LIMITED ANNOUNCES FINANCIAL YEAR 2014/15 FINAL RESULTS
Highlights
• HHI's net profit bottomed out in FY15 with profit attributable to owners of the Company of
RMB520 million or RMB16.86 cents per share
• A final dividend of RMB8.4 cents (equivalent to HK10.1665 cents) per share and a special final dividend of RMB18 cents (equivalent to HK21.7854 cents) per share. Projects'
performances and financial restructuring provide strong base for strong dividend to HHI's
shareholders
• PBOC lending rate cuts will lower Western Delta Route's finance cost
• GS Superhighway resumed growth, average daily toll revenue rebounded by 2% year-on-year in the second half of FY15
• Western Delta Route's net toll revenue up 9% year-on-year in FY15
Hong Kong, 26 August 2015 - Hopewell Highway Infrastructure Limited ("HHI" or "the Company"; SEHK HKD-traded Shares: 737; SEHK RMB-traded Shares: 80737), a leading toll-road infrastructure company, announced today its final results for the year ended 30 June 2015.
For the year under review, HHI's share of the aggregate net toll revenue of its expressway projects increased slightly from RMB1,916 million to RMB1,919 million. The toll revenue of Guangzhou- Shenzhen Superhighway ("GS Superhighway") declined by 3% during the year under review, which was mainly attributable to the full opening of the Coastal Expressway on 28 December 2013. Such drop was fully offset by the continuous growth in the net toll revenue of the Western Delta Route, which recorded 9% increase to RMB481 million. The aggregate EBITDA of toll expressways decreased by 1% to RMB1,602 million mainly due to the rise in operating expenses given the expenses on the GS Superhighway's asphalt road surface repair of approximately RMB12 million recorded in FY15, which was capitalised in FY14, and the one-off expenses incurred by Phase III of the Western Delta Route ("Phase III West") for finalising its project cost of RMB5 million. Net interest income at corporate level decreased as the fall in finance costs was offset by a decrease in total interest income. As a result of the fall in net profit of the toll expressway projects and a decrease in net interest income at corporate level, profit attributable to owners of the Company decreased by
6% to RMB520 million.
The Company believes its net profit had bottomed out in FY15, given (i) GS Superhighway's average daily toll revenue rebounded by 2% year-on-year in the second half of FY15, one year after the full opening of the Coastal Expressway on 28 December 2013; (ii) Western Delta Route maintains healthy growth. It is targeted to achieve profit breakeven in FY16; (iii) the series of People's Bank of China's lending rate cuts for RMB loan will benefit the Western Delta Route by lowering its finance costs; and (iv) Phase II of the Western Delta Route's ("Phase II West") new financial plan will reduce debt and interest expense.
The Board of Directors has proposed a final dividend of RMB8.4 cents (equivalent to HK10.1665 cents at the exchange rate of RMB1: HK$1.21030) per share and a special final dividend of RMB18 cents (equivalent to HK21.7854 cents at the exchange rate of RMB1: HK$1.21030) per share for the year ended 30 June 2015 (30 June 2014: final dividend RMB8.1 cents per share). Shareholders will be given the option of electing to receive the final dividend in either RMB or HK Dollars or a
Hopewell Highway Infrastructure Limited Announces Financial Year 2014/15 Final Results
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combination of RMB and HK Dollars. The proposed final dividend will be paid on 1 December 2015 to shareholders registered at the close of business on 30 October 2015.
Mr. Thomas Wu, Managing Director of HHI, said: "We continue to see strong growth from the Western Delta Route. With the opening of the HZM Bridge in 2017 as reported by the media, we strongly believe that HHI's toll road portfolio will enable the Company to generate the best value for its shareholders."
GS Superhighway's average daily traffic grew 2% during the year to 455,000 vehicles and average daily toll revenue recorded a mild drop of 3% to RMB8.5 million. In the second half of FY15, the average daily toll revenue of the GS Superhighway rebounded by 2% year-on-year, one year after full opening of the Coastal Expressway since 28 December 2013, compared to a 6% fall year-on-year in the first half. This indicates that the diversion impact has been fully realised. Growth in the traffic of Class 1 small car continued, with average daily traffic up 4% year-on-year. It accounted for 76.3% of the GS Superhighway's total traffic volume, compared to 75.4% in the previous year.
The average daily traffic and average daily toll revenue of the Western Delta Route continued to grow healthily by 10% and 9% to 138,000 vehicles and RMB2.7 million respectively. It recorded a 9% year-on-year growth in EBITDA (JV level) to approximately RMB800 million in FY15, and is targeted to increase by approximately RMB100 million per year until the HZM Bridge opens in 2017 as reported by the media. The average daily toll revenue level for the Western Delta Route to achieve profit breakeven is lowered to below RMB3 million from RMB3.2 million mainly due to lower interest expenses. It is targeted to achieve profit breakeven in FY16.
Benefiting from the stable economic environment and continuous growth of Guangdong's registered car population, HHI targets the shared aggregate net toll revenue of the GS Superhighway and the Western Delta Route of FY16 to reach the historical high of RMB2,026 million recorded in FY07.
HHI has a sound financial plan and enjoys a strong and solid financial position. As at 30 June 2015, HHI's net cash on hand (excluding JV companies) together with the shareholder's loan receivable from West Route JV (net of registered capital injection) amounted to RMB913 million. Moreover, the GS Superhighway JV is engaging with the banks to arrange loan rescheduling, which will help accelerate the dividend distribution by the GS Superhighway JV to HHI and further enhance HHI's liquidity. Dividend amounting to approximately RMB200 million per year during calendar year 2015 to 2019 will be accelerated and paid to HHI. Furthermore, for the purpose of improving financing flexibility, West Route JV is under negotiation with the bank to extend the maturity date of Phase I of the Western Delta Route's ("Phase I West") bank loans.
The application for the increase in Phase II West's registered capital of a total of RMB636 million is in process. The first and second tranches of additional registered capital injection completed in February and July 2015 respectively, while the third tranche is targeted to complete in the third quarter of 2015. As of 16 August 2015, HHI had received RMB212 million out of the RMB682 million of net shareholder's loan repayment from West Route JV and full repayment of the net shareholder's loan is expected to complete by October 2015. This new financial plan will improve HHI's liquidity and West Route JV's financial position and HHI no longer needs to inject shareholder's loan into Phase II West. No further capital expenditure is needed for HHI in respect of the West Route JV, which is financially self-sufficient until FY18 even if assuming no growth in the average daily toll revenue during the period.
Details of the expressways' traffic and revenue figures can be found at the website:
www.hopewellhighway.com
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Financial Highlights
(in million RMB, unless otherwise stated)
For the year ended 30 June | 2014 | 2015 | % Change |
Net toll revenue | 1,916 | 1,919 | +0.1% |
EBITDA of toll expressways | 1,627 | 1,602 | -1% |
Profit attributable to owners of the Co. | 553 | 520 | -6% |
EPS (RMB cents) | 17.94 | 16.86 | -6% |
Interim DPS (RMB cents/HK cents) | 9.80/12.4590 | 8.40/10.6376 | |
Final DPS (RMB cents/HK cents) | 8.10/10.1806 | 8.40/10.1665 | |
Special final DPS (RMB cents/HK cents) | - | 18.00/21.7854 | |
Total DPS (RMB cents/HK cents) | 17.90/22.6396 | 34.80/42.5895 |
30-Jun-14 | 30-Jun-15 | |
Total debt/total assets | 44% | 42% |
Net debtN1/equity attributable to owners of the Co. | 78% | 71% |
Net cash (HHI corporate level)N2 | 116 | 337 |
N1: Net debt is defined as total debt less bank balances and cash, together with pledged bank balances and deposits for
HHI corporate level and share of JV companies.
N2: Net cash is defined as bank balances and cash less corporate debt, excluding JV companies' bank balances and cash of
RMB273 million as at 30 June 2015 (as at 30 June 2014: RMB201million).
Operational Highlights
For the year ended 30 June | 2014 | 2015 | % Change |
Average Daily Toll Revenue (RMB '000) GS Superhighway Western Delta Route Phase I West Phase II West Phase III West | 8,682 2,492 499 1,559 434 | 8,462 2,715 525 1,651 540 | -3% +9% +5% +6% +24% |
Average Daily Traffic ('000 vehicles) GS Superhighway Western Delta Route Phase I West Phase II West Phase III West | 444 126 N3 49 100 20 | 455 138 N3 53 109 25 | +2% +10% +10% +10% +25% |
N3: Western Delta Route's traffic figure was smaller than the sum of Phases I, II and III West as each vehicle which travelled across different phases was counted as one vehicle under the traffic of the Western Delta Route.
- End -
Hopewell Highway Infrastructure Limited Announces Financial Year 2014/15 Final Results
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For further information, please contact:
Y Communications
Sukyi Yau
Office: 2254 8854
Mobile: 9030 7204
Email: syau@ycom.hk
Michael Yau
Office: 2254 8853
Mobile: 9781 5898
Email: myau@ycom.hk
Notes to Editors
Hopewell Highway Infrastructure Limited
Hopewell Highway Infrastructure Limited, a subsidiary of Hopewell Holdings Limited, is a leading
infrastructure company in the Pearl River Delta region and is involved in all phases of expressway infrastructure projects from initiating and promoting to developing and operating. The existing toll expressway projects held by HHI with total 6 lanes in dual directions include: (1) the Guangzhou-Shenzhen Superhighway, a major expressway connecting Guangzhou, Dongguan, Shenzhen and Hong Kong (certain sections being 10 lanes); (2) Phase I of the Western Delta Route ("Phase I West"), an expressway linking Guangzhou and Shunde; (3) Phase II of the Western Delta Route ("Phase II West"), an expressway linking the end of Phase I West in Shunde at the northern end and extending southwards to Zhongshan; and (4) Phase III of the Western Delta Route ("Phase III West") an expressway connecting Phase II West in Zhongshan at the northern end and extending southwards to Zhuhai.
Hopewell Highway Infrastructure Limited Announces Financial Year 2014/15 Final Results
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