SHENZHEN INVESTMENT HOLDINGS BAY AREA DEVELOPMENT COMPANY LIMITED Press Release
EBITDA of all toll expressways grew 8% year-on-year given healthy operation
Net profit attributable to owners of the Company dropped 4% year-on-year to RMB251 million representing RMB8.13 cents per share, mainly because the increase in net profit of toll expressways was offset by net exchange loss and drop in net interest income at corporate level
An interim dividend of RMB8.4cents (equivalent to HK9.9737 cents) per share
GS Superhighway's growth momentum continued
Western Delta Route ("WDR") first turned profitable in July 2015 with net profit of RMB19 million (HHI's share) in 1H FY16, compared to a net loss of RMB23 million in 1H FY15
PBOC lending rate cuts will lower WDR's finance cost by approximately RMB39 million, RMB58 million and RMB61 million in FY16, FY17 and FY18 respectively (HHI's share)
RMB60 million of net exchange loss on RMB devaluation (HHI's share)
Core operations improved. HHI's FY16 net profit could be flat year-on-year due to (i) RMB fluctuation and (ii) Shenzhen toll-free measures for Nanguang Expressway and Longda Expressway (Shenzhen section) effective 7 February 2016
Strong financial position and solid bases for strong dividend in the future with i) HHI corporate level net cash of RMB571 million as at 31 December 2015 and ii) steady dividends from the GS Superhighway JV of over RMB600 million per year
Traffic disclosure by using the full-length equivalent traffic to better reflect road usage, which is in line with industry practice
For the period under review, HHI's share of the aggregate net toll revenue of its expressway projects increased by 4% to RMB1,023 million. Guangzhou-Shenzhen Superhighway ("GS Superhighway") regained growth momentum with net toll revenue increasing by 2% to RMB757 million. Western Delta Route continued to record healthy toll revenue growth, with net toll revenue up 7% to RMB266 million. It first turned profitable in July 2015 and recorded RMB19 million net profit during the period under review, compared to a net loss of RMB23 million of the last corresponding period. The Company's share of net exchange loss of RMB60 million on the GS Superhighway JV's US Dollar and HK Dollar loans was recorded, mainly attributable to RMB devaluation during the period under review. Nevertheless, such US Dollar and HK Dollar loans still enjoyed interest savings compared with RMB loan which was charged at a higher borrowing rate. Overall, the increase in net profit of toll expressways was offset by net exchange loss and a drop in net interest income at corporate level from RMB35 million to RMB23 million after full repayment of shareholder's loan advanced by the Company to the West Route JV as interim financing for Phase II West. As a result, profit attributable to owners of the Company decreased by 4% to RMB251 million.
The Company still maintains a positive outlook on the future performance, given HHI's net profit growth is supported by (i) the GS Superhighway's growth momentum continued; (ii) the Western Delta Route first turned profitable in July 2015; (iii) the series of PBOC's lending rate cuts since November 2014 will benefit the West Route JV by lowering its finance costs; (iv) Phase II West's
new financial plan was completed, reducing its debt and interest expenses and (v) interest expenses of the West Route JV has been further lowered after utilising its surplus cash on hand to prepay bank loan principal of RMB261 million due in 2016 before 31 December 2015. Moreover, no further capital expenditure is needed for HHI in respect of the Western Delta Route. Strong financial position with HHI corporate level net cash of RMB571 million as at 31 December 2015 and steady dividends from GS Superhighway JV of over RMB600 million per year provide solid bases for strong dividend.
On 2 February 2016, the Board of Directors declared an interim dividend of RMB8.4 cents (equivalent to HK9.9737 cents at the exchange rate of RMB1: HK$1.18735) per share for the year ending 30 June 2016 (interim dividend of FY2015: RMB8.4 cents per share, equivalent to HK10.6376 cents per share). Shareholders have been given the option of electing to receive the interim dividend in either RMB, HK Dollars or a combination of RMB and HK Dollars. The interim dividend will be paid on 22 March 2016 to shareholders registered at the close of business on 22 February 2016.
Mr. Thomas Wu, Managing Director of HHI, said: "We continue to see healthy growth from the Western Delta Route. With the stable economic growth and strong traffic demand, we believe HHI's toll road portfolio continues to enable the Company to generate value for its shareholders."
GS Superhighway's average daily toll revenue rose by 2% to RMB8.8 million and average daily full- length equivalent traffic grew 4% to 93,000 vehicles, indicating a trend of recovery. However, Shenzhen Transport Commission announced on 30 November 2015 to purchase four toll expressways in Shenzhen which would become toll-free since 7 February 2016. Among which, the Nanguang Expressway and Shenzhen section of Longda Expressway are parallel to the Taiping to Nantou section of the GS Superhighway. Its impact on the GS Superhighway is yet to be assessed.
The average daily toll revenue and average daily full-length equivalent traffic of the Western Delta Route grew steadily by 7% and 11% to RMB3 million and 40,000 vehicles respectively, reaching historical high.
Effective from the first half of FY16, the Company has unified its average daily traffic disclosure by using the full-length equivalent traffic in order to be in line with the industry practice, increase transparency to better reflect road usage and respond to market demand.
HHI enjoys a strong and solid financial position. As at 31 December 2015, HHI's bank balances and cash on hand (excluding JV companies) amounted to RMB837 million. After netting off HHI corporate's bank loans totalled RMB266 million, the net cash on hand at HHI corporate level of RMB571 million, together with available banking facilities of RMB655 million and stable cash dividends from the GS Superhighway JV will provide sufficient financial resources for its operations and potential investments.
Phase II West's new financial plan whereby the increase in its registered capital totalling approximately RMB636 million has been completed during the period under review. Together with the additional project bank loan of RMB500 million drawn by the West Route JV in October 2015, the remaining shareholder's loan advanced by the Company to the West Route JV as interim financing for Phase II West has been fully repaid to HHI.
The GS Superhighway's and Phase I West's loan rescheduling were completed during the period under review. It would help accelerate the dividend distributions by the GS Superhighway JV to HHI and further enhance HHI's liquidity and West Route JV's financing flexibility.
Details of the expressways' traffic and toll revenue figures can be found at the website: www.hopewellhighway.com
Financial Highlights(in million RMB, unless otherwise stated)
For the six months ended 31 December | 2014 | 2015 | % Change |
Net toll revenue | 988 | 1,023 | +4% |
EBITDA of toll expressways | 800 | 860 | +8% |
Profit attributable to owners of the Company | 261 | 251 | -4% |
EPS (RMB cents) | 8.48 | 8.13 | -4% |
Interim DPS (RMB cents/HK cents) | 8.4/10.6376 | 8.4/9.9737 |
30-Jun-15 | 31-Dec-15 | |
Total debt/total assets | 42% | 44% |
Net debtN1/equity attributable to owners of the Co. | 71% | 76% |
Net cash (HHI corporate level)N2 | 337 | 571 |
N1: Net debt is defined as total debt less total bank balances and cash (including 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 RMB252 million as at 31 December 2015 (as at 30 June 2015: RMB273million).
For the six months ended 31 December | 2014 | 2015 | % Change |
Average Daily Toll Revenue (RMB '000) | |||
GS Superhighway | 8,631 | 8,839 | +2% |
Western Delta Route | 2,781 | 2,973 | +7% |
Phase I West | 532 | 581 | +9% |
Phase II West | 1,702 | 1,768 | +4% |
Phase III West | 546 | 624 | +14% |
Average Daily Full-Length Equivalent Traffic ('000 vehicles)N3 | |||
GS Superhighway | 90 | 93 | +4% |
Western Delta Route | 36 | 40 | +11% |
Phase I West | 45 | 49 | +10% |
Phase II West | 48 | 52 | +9% |
Phase III West | 19 | 22 | +19% |
N3: Average daily full-length equivalent traffic is defined as the total distance travelled by all vehicles on the expressway divided by the full length of the expressway and the number of days in the period under review.
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For further information, please contact:
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.
HHI - Hopewell Highway Infrastructure Ltd. issued this content on 24 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 February 2016 08:37:06 UTC
Original Document: http://www.hopewellhighway.com/press/eng/HHI_FY16_Interim_Results_Press_Release_E_20160224_final.pdf
