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Zhejiang Expressway : Announces 2012 First Quarter Results

05/11/2012 | 09:32am US/Eastern
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[FOR IMMEDIATE RELEASE]

Zhejiang Expressway Announces 2012 First Quarter Results Net Profit Down 1.9% to RMB417 Million *************************************** Growth in traffic volume decelerated

(Hong Kong, May 11, 2012) - Zhejiang Expressway Co., Ltd. ("Zhejiang Expressway" or the "Company") (HKEx code: 576; LSE code: ZHEH; ADR code: ZHEXY) today announced the unaudited consolidated operating results of the Company and its subsidiaries (collectively the "Group") for the three months ended March 31, 2012 (the "Period").
During the Period, revenue for the Group amounted to Rmb1,584.49 million, representing a decrease of
2.6% year-on-year. Profit attributable to owners of the Company amounted to Rmb416.94 million. Basic earnings per share were Rmb9.60 cents (same period in 2011: Rmb9.79 cents).
Mr. Chen Jisong, Chairman of the Company said, "Economic growth in Zhejiang Province continued to demonstrate a slowing trend, and the increase in traffic volume on the Shanghai-Hangzhou-Ningbo Expressway decelerated accordingly during the Period. The organic growth in the traffic volume of the Shangsan Expressway showed a month-by-month downward trend. Therefore, overall toll revenue was lower than expected."
During the Period, the average daily traffic volume in full-trip equivalents along the Shanghai-Hangzhou-Ningbo Expressway was 40,303, representing growth of 4.5% as compared to the same period of the previous year, while total toll income amounted to Rmb694.80 million, representing growth of 1.7% year-on-year. Average daily traffic volume in full-trip equivalents along the Shangsan Expressway was 17,143, representing a decrease of 3.5% year-on-year, while total toll income was Rmb163.98 million, representing a decrease of 7.1% year-on-year.
In the toll road-related business operation, as a result of slowing growth in traffic volume along the Group's two expressways, the client volume at the service areas declined. However, owing to increases in the sale prices of petroleum products, which in turn led to a substantial increase in sales revenue of petroleum products, overall income from the service areas was satisfactory. Thus, income from toll road-related businesses amounted to Rmb497.35 million during the period, representing a year-on-year increase of 7.1%
As for the securities business, during the Period, the market share of the securities brokerage increased over the same period last year, while the customer base continued to rise and the operational network increased to 60 branches. However, the aggregate trading volume in the domestic stock market declined significantly as compared to the corresponding period last year as the market continued to experience a downward trend, causing the commission income to decline accordingly, thereby undermining the performance of the securities business during the Period. Zheshang Securities realized operating income of Rmb273.67 million during the period, representing a decrease of 22.4% year-on-year.
Mr. Chen said, "Looking forward, the decelerating pace of economic growth in Zhejiang Province is anticipated to continue. This is expected to have an impact on the organic growth in the traffic volume of the Group's two expressways. At the same time, as the clean-up and rectification programme for toll roads is close to completion, two new policies - the toll-by-driving route policy and the improved vehicle tolls charging method - will be implemented on the expressways throughout Zhejiang Province from 15 May 2012 onwards. In particular, the toll-by-driving route policy for expressways is expected to have a positive impact on the Group. On the other hand, due to the steadily drop in inflation, the possible relaxation of the monetary policy is likely to impact China's stock market positively."
Mr. Chen concluded, "Entering into the second quarter of 2012, the Company's management will, as in the past, continue to excel in its principal expressway operations, closely monitor any changes in policies relevant to the industry so as to adjust its business strategy and continue to identify appropriate investment projects in the precondition of controllable risk with a view to maximizing shareholder value."

About Zhejiang Expressway Co., Ltd

Established in 1997, Zhejiang Expressway Co., Ltd. is regarded by the Zhejiang Provincial Government as its main enterprise for investment, development, operation, maintenance and management of high-grade roads in Zhejiang Province. The Company has concession rights to operate the Shanghai-Hangzhou-Ningbo Expressway and the Shangsan Expressway for a period of 30 years. The Company and its subsidiaries also carry out certain ancillary businesses such as automobile servicing, operation of gas stations and billboard advertising along expressways, as well as the securities business.
~ End ~ For further information, please contact:

Zhejiang Expressway Co., Ltd. Mr. Tony Zheng / Ms. Helen Wu Tel : (86571) 8798 7700

Fax : (86571) 8795 0329

Hill+Knowlton Strategies Asia

Shirley Lo
Tel : (852) 2894 6214
Email : shirley.lo@hkstrategies.com
Brian Chan
Tel : (852) 2894 6240
Email : brian.chan@hkstrategies.com

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