Shenzhen Expressway announced its first quarterly unaudited results of the Company and its subsidiaries (collectively, the “Group”) prepared in accordance with China Accounting Standards for Business Enterprises (“CAS”) for the three months ended 31 March 2010 (the “Reporting Period”).
In the first quarter of 2010, the Group realised a revenue of RMB506,524,000, representing an increase of 93.32% as compared to the same period of 2009 (“year-on-year”). Of this amount, toll revenue amounted to RMB484,249,000, up 96.42% year-on-year. During the Reporting Period, net profit attributable to shareholders of the Company (“Net Profit”) amounted to RMB168,955,000, up 39.33% year-on-year. Earnings per share amounted to RMB0.077 (2009 same period: RMB0.056).
Mr. Yang Hai, Chairman of Company, said, “The Group benefitted from the significant year-on-year increases in the average daily traffic volumes and toll revenues of all projects owing to a recovery of the macro-economy and the sustained increase in car ownership, as well as the profit contribution from the acquisition of 45% equity interests in Jihe Expressway (Eastern Section) last year. As a result, the pressure upon the Group due to new projects being at their incubating stage, increased operating costs and increased finance costs has been relieved. Consequently, the Group’s first quarter operating results grew significantly year-on-year.”
During the Reporting Period, average daily toll revenues generated on Meiguan Expressway, Jihe Expressway (Eastern Section), Jihe Expressway (Western Section), Shuiguan Expressway, Yanpai Expressway, Yanba Expressway and Nanguang Expressway were RMB847,000, RMB1,347,000, RMB1,041,000, RMB1,090,000, RMB373,000, RMB209,000 and RMB389,000 respectively, representing year-on-year increases of 16.3%, 16.3%, 19.9%, 23.2%, 20.5%, 24.6% and 85.6% respectively. Average daily toll revenues generated on the Group’s toll roads located outside Shenzhen, such as Yangmao Expressway, Guangwu Project, Jiangzhong Project, Guangzhou Western Second Ring Expressway, Wuhuang Expressway, Changsha Ring Road and Nanjing Third Bridge recorded increases of 20.4%, 26.0%, 14.8%, 51.8%, 18.0%, 11.4% and 22.9% respectively.
During the Reporting Period, toll revenue of the Group increased by 96.42% year-on-year, mainly because of the contribution of additional toll revenue of RMB121,266,000 from Jihe East Company, which has been consolidated into the Group’s financial statements since 30 September 2009 and accounted for 25.04% of the Group’s toll revenue for the Reporting Period; and that Qinglian Class 1 Highway commenced expressway operation on 1 July 2009, leading to a year-on-year increase of 157.20% of toll revenue from Qinglian Project. Toll revenues from other toll highways which have been consolidated into the Group’s financial statements recorded an overall increase of 25.22% year-on-year.
During the Reporting Period, capital expenditures of the Group amounted to RMB380 million, mainly for the investment in the construction of the Liannan Section of Qinglian Project. As at the end of the Reporting Period, the reconstruction of the Liannan Section into an expressway and the expansion works of Shuiguan Expressway and Meiguan Expressway progressed as planned. Progress of the Company’s entrusted construction projects including the Coastal project and Phase II of the Nanping project also met expectations.
During the Reporting Period, in addition to active adjustments made on the loan structure and loan categories in order to enjoy better borrowing terms, the Company has issued medium-term notes amounting to RMB700 million with a term of three years and carrying a nominal interest rate of 3.72% for the first year. This helps lower the overall borrowing cost of the Group effectively. During the Reporting Period, the Group’s consolidated borrowing cost was 5.06%, a decrease of 0.41 percentage-point as compared to that of 2009. The Company will continuously study on various financing tools in the capital market, with a view to carrying out financing arrangements to cope with the changes in the internal and external environments.
Although the Company’s operating results for the first quarter were better than expected, Group President Mr. Wu Ya De said, “Overall speaking, year 2010 will still be a challenging year for Shenzhen Expressway. There are still uncertainties on the future macro-economic environment, while at this stage the Group is still faced with pressure from its rising operating expenses and heavy financing costs. In addition, for the next two years, the Company also needs to cope with the challenge brought by road network changes. Hence, the Company needs to operate with prudence and strives to expand its income and minimise expenses through various means, so as to ensure stable operating results and build a solid foundation for the Company’s upcoming developments.”
Shenzhen Expressway announced its first quarterly unaudited results of the Company and its subsidiaries (collectively, the “Group”) prepared in accordance with China Accounting Standards for Business Enterprises (“CAS”) for the three months ended 31 March 2010 (the “Reporting Period”).
