Press Release

HOPEWELL HIGHWAY INFRASTRUCTURE LIMITED ANNOUNCES FINANCIAL YEAR 2016/17 FINAL RESULTS Highlights FY17
  • Net profit grew 22% yoy to RMB623 million mainly due to growth in core operations and narrowed net exchange loss

  • Profit before net exchange loss up 8% yoy to RMB649 million

  • Total dividend of RMB30.2 cents per share (final dividend of RMB11.6 cents per share; special final dividend of RMB10 cents per share; interim dividend of RMB8.6 cents per share)

  • The growth momentum of the GS Superhighway is persistent. Its average daily full-length equivalent traffic reached the historical high, while average daily toll revenue set a new high after the tariff cut in June 2012

  • Western Delta Route ("WDR") recorded strong growth with net profit rising 169% yoy to RMB107 million (HHI's share)

  • Net exchange loss on RMB depreciation narrowed to RMB17 million (HHI's share) (FY16: RMB82 million)

  • Disclose WDR as a whole starting from FY17 annual results. Simplify disclosure to reflect full operation (WDR fully opened in January 2013 and turned profitable since FY16)

  • West Route JV utilised surplus cash to fully prepay RMB807 million of bank loan principal due in 2017 and 2018 as at 30 June 2017 (JV company level)

  • Strong financial position with HHI corporate level net cash of RMB469 million or RMB0.15 per share as at 30 June 2017

    Upcoming: FY18 and Beyond

  • FY18 results will be affected by the one-off impact from the GS Superhighway JV's profit sharing ratio adjusted from 48% to 45% starting from 1 July 2017, yet will be supported by (i) GS Superhighway's and WDR's healthy growth and (ii) fall in WDR's interest expenses

  • 100% dividend payout target (full-year basis) is sustainable, given that (i) HHI corporate level net cash stayed at RMB469 million as at 30 June 2017; (ii) HHI expects to receive approximately RMB600 million dividend from the GS Superhighway JV in FY18, which is similar to HHI's proposed annual regular dividend to be distributed to shareholders in FY17;

    (iii) West Route JV targets to distribute dividend to HHI starting from 2020 the earliest

  • WDR's finance cost will drop in FY18 mainly due to (i) 10% discount on individual bank loans' borrowing rates and (ii) prepayment of bank loans

  • The soon-to-open Hong Kong-Zhuhai-Macao Bridge will benefit WDR

  • Guangdong-Hong Kong-Macao Bay Area's development will benefit the GS Superhighway and WDR

Hong Kong, 16 August 2017 - 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 2017.

For the year under review, the aggregate average daily toll revenue of the Guangzhou-Shenzhen Superhighway ("GS Superhighway") and the Western Delta Route grew by 8% yoy to RMB12.5 million and the aggregate total toll revenue amounted to RMB4,579 million.

Given healthy core operation, HHI's share of the aggregate EBITDA of toll expressways grew by 9% to RMB1,859 million. The Company's net profit from its toll road projects increased by 9% to RMB666 million. Net exchange loss on the GS Superhighway JV's US Dollar and HK Dollar loans shared by HHI during FY17 substantially reduced to RMB17 million from RMB82 million in the previous year. As a result, the profit attributable to owners of the Company increased by 22% to RMB623 million or RMB20.21 cents per share.

The Board of Directors has proposed a final dividend of RMB11.6 cents (equivalent to HK13.58986 cents at the exchange rate of RMB1: HK$1.17154) per share and a special final dividend of RMB10 cents (equivalent to HK11.71540 cents at the exchange rate of RMB1: HK$1.17154) per share for the year ended 30 June 2017 (30 June 2016: final dividend RMB8.2 cents per share, special final dividend of RMB40 cents per share). Shareholders will be given the option of electing to receive the dividend in either RMB or HK Dollars or a combination of RMB and HK Dollars. The proposed final dividend and special final dividend will be paid on 4 December 2017 to shareholders registered at the close of business on 1 November 2017.

Mr. Thomas Wu, Managing Director of HHI, said: "We are very pleased to see that the growth momentum of both the GS Superhighway and the Western Delta Route is persistent. Going forward, we expect that the soon-to-open Hong Kong-Zhuhai-Macao Bridge, together with the strategic 'Guangdong-Hong Kong-Macao Bay Area' development, will help lift economic growth of the Pearl River Delta ("PRD") region and benefit the Group's expressway projects in the long term."

Supported by the healthy economic environment in the PRD region, GS Superhighway's average daily toll revenue increased by 6% yoy to RMB9.2 million, which set a new high after the tariff cut in June 2012. Meanwhile, the average daily full-length equivalent traffic grew by 8% yoy to 99,000 vehicles and reached historical high.

The average daily toll revenue and average daily full-length equivalent traffic of the Western Delta Route, amounted to RMB3.4 million and 47,000 vehicles and reached historical high with strong yoy growth of 15% and 17% respectively.

Starting from FY17 annual results, information on the Western Delta Route will be disclosed as a whole. Disclosure has been simplified to reflect the full operation of the Western Delta Route, since it was fully opened in January 2013 and turned profitable since FY16.

HHI enjoys a strong and solid financial position. Net cash at HHI corporate level amounted to RMB469 million as at 30 June 2017 and steady dividend from the GS Superhighway JV provide solid bases for strong dividend. It is expected that dividend from the GS Superhighway JV to HHI will amount to approximately RMB600 million in FY18, which is similar to the Company's proposed annual regular dividend to shareholders in FY17. In view of the healthy growth in toll revenue, West Route JV targets to distribute dividend to HHI starting from 2020 the earliest.

Pursuant to the joint venture agreement, HHI's profit sharing ratio in the GS Superhighway JV has been adjusted from 48% to 45% starting from 1 July 2017 for the next ten years until the end of its contractual operation period, i.e. 30 June 2027. Such adjustment will have a one-off impact on HHI's results for FY18 as compared to FY17. Nevertheless, the Company remains positive on the future performance of HHI, given HHI's net profit growth is supported by (i) the persistent growth momentum of the GS Superhighway and the Western Delta Route; (ii) that the West Route JV's EBITDA (JV company level) increased to approximately RMB1,032 million in FY17. The Western Delta Route has been achieving healthy growth since opening and will continue to benefit from prosperous economic and road network developments including the soon-to-open Hong Kong- Zhuhai-Macao Bridge; and (iii) that the interest expenses of the West Route JV is expected to drop in FY18 given the 10% discount on individual bank loans' borrowing rates and the prepayment of bank loans.

Details of the expressways' traffic and revenue figures can be found at the website: www.hopewellhighway.com

Financial Highlights

(in million RMB, unless otherwise stated)

For the year ended 30 June

2016

2017

% Change

Net toll revenue

2,002

2,159

+8%

EBITDA of toll expressways

1,705

1,859

+9%

Profit before net exchange loss

603

649

+8%

Profit attributable to owners of the Co.

511

623

+22%

EPS (RMB cents)

16.59

20.21

+22%

Interim DPS (RMB cents/HK cents)

8.40/9.9737

8.60/9.59416

Final DPS (RMB cents/HK cents)

8.20/9.5484

11.60/13.58986

Special final DPS (RMB cents/HK cents)

40.00/46.5776

10.00/11.71540

Total DPS (RMB cents/HK cents)

56.60/66.0997

30.20/34.89942

30-Jun-16

30-Jun-17

Total debt/total assets ratio

43%

50%

Net debtN1/equity attributable to owners of the Co.

73%

99%

Net cash (HHI corporate level)N2

652

469

N1: Net debt is defined as total debt (including shares of JV companies) less total bank balances and cash (including shares of JV companies).

N2: Net cash is defined as bank balances and cash less corporate debt, excluding JV companies' bank balances and cash of RMB440 million as at 30 June 2017 (as at 30 June 2016: RMB262 million).

Operational Highlights

For the year ended 30 June

2016

2017

% Change

Average Daily Toll Revenue (RMB '000)

GS Superhighway

8,682

9,169

+6%

Western Delta Route

2,941

3,377

+15%

Average Daily Full-Length Equivalent TrafficN3 ('000 vehicles)

GS Superhighway

92

99

+8%

Western Delta Route

40

47

+17%

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 year under review.

- End -

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 (SEHK: 54), 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); and

(2) the Western Delta Route, the most direct and convenient expressway artery linking Guangzhou, Shunde, Zhongshan and Zhuhai.

HHI - Hopewell Highway Infrastructure Ltd. published this content on 16 August 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 16 August 2017 08:46:03 UTC.

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