results announcement 2015 3Q.xlsx CHINA MERCHANTS HOLDINGS (PACIFIC) LTD Company Registration Number: 198101278D


Third Quarter Financial Statement And Dividend Announcement



PART 1 - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1,Q2, & Q3), HALF-YEAR AND FULL YEAR ANNOUNCEMENTS


1.(a) An income statement and statement of comprehensive income or a statement of comprehensive income for the group together with a comparative statement for the corresponding period of the immediately preceding financial year


Consolidated Income Statement


Revenue


Cost of sales


Gross profit


Other operating income Administrative expenses

Group

Third quarter ended 30 September

Nine-month period ended 30 September

2015

2014

Change

2015

2014

Change

HK$'000

HK$'000

%

HK$'000

HK$'000

%


548,777


528,681


4


1,579,884


1,487,235


6

(214,059)

(218,877)

(2)

(653,830)

(646,076)

1

334,718

309,804

8

926,054

841,159

10

7,051

48,218

(85)

62,388

93,880

(34)

(24,498)

(22,397)

9

(67,782)

(68,863)

(2)

(897)

(14)

6,307

(3,238)

(738)

339

(28,478)

(28,156)

1

(89,347)

(90,666)

(1)

5,426

5,921

(8)

16,689

17,742

(6)

63,520

71,582

(11)

190,657

219,281

(13)

356,842

384,958

(7)

1,035,421

1,011,795

2


(89,934)


(82,455)


9


(253,460)


(218,909)


16

266,908

302,503

(12)

781,961

792,886

(1)

-

-

N.M.

-

64,092

N.M.

266,908

302,503

(12)

781,961

856,978

(9)


168,357


210,923


(20)


505,694


608,175


(17)

98,551

91,580

8

276,267

248,803

11

266,908

302,503

(12)

781,961

856,978

(9)

(i)


(i)


(ii)

Other operating expenses


Finance costs


Subsidy income


Share of results of joint ventures, net of tax


Profit before tax from continuing operations


Income tax expense


Profit from continuing operations, net of tax Profit from discontinued operation, net of tax

(iii)


(iv)

Profit for the period


Attributable Owners of the Company Non-controlling interests

Consolidated Statement Of Comprehensive Income


Group

Third quarter ended 30 September

Nine-month period ended 30 September

2015

2014

Change

2015

2014

Change

HK$'000

HK$'000

%

HK$'000

HK$'000

%

266,908

302,503

(12)

781,961

856,978

(9)


(480,565)


6,464


N.M.


(484,642)


(100,498)


382


-


-


-


-


(80,960)


(100)

(480,565)

6,464

N.M.

(484,642)

(181,458)

167

(213,657)

308,967

N.M.

297,319

675,520

(56)


(211,497)


213,452


N.M.


118,460


450,354


(74)

(2,160)

95,515

N.M.

178,859

225,166

(21)

(213,657)

308,967

N.M.

297,319

675,520

(56)

Profit for the period


Other comprehensive income: Items that may be reclassified subsequently to profit or loss

Translation differences arising on consolidation


Reclassification to income statement upon disposal of discontinued operations


Total items that may be reclassified to profit or loss, representing other comprehensive income for the period


Total comprehensive income for the period


Attributable to: Owners of the Company Non-controlling interests


N.M.: Not Meaningful


Disposal of a 100% interests in China Merchants Pacific (NZ) Limited ('CMPNZ')


On 27 September 2013, the Company entered into a conditional sale and purchase agreement with China Merchants Properties Development Limited, an indirect wholly-owned subsidiary of China Merchants Group, to dispose of its entire interests in CMPNZ. The disposal was completed on 16 April 2014.


Acquisition of a 100% interest in Honest Queen International (Jiangxi) Jiurui Expressway Development Co Ltd ('Jiurui Expressway')


On 21 July 2014, the Company entered into a conditional sale and purchase agreement to indirectly acquire a 100 per cent. equity interest in Honest Queen International (Jiangxi) Jiurui Expressway Development Co., Ltd through Hong Kong Honest Queen International Investment Limited, a company incorporated in Hong Kong. Honest Queen International (Jiangxi) Jiurui Expressway Development Co., Ltd owns the rights to operate the Jiurui Expressway (Jiujiang-Ruichang Section), an expressway located in Jiangxi Province, People's Republic of China.


Pursuant to the sale and purchase agreement, the acquisition of Jiurui Expressway was completed on 9 September 2014 and the financial results of Jiurui Expressway have been consolidated to the Group's accounts as a subsidiary since then.


Acquisition of three expressways located in Guangxi Zhuang Autonomous Region ('Guangxi Expressways'), namely Guixing Expressway, Guiyang Expressway and Yangping Expressway.


On 23 June 2015, three directly wholly-owned subsidiaries of the Company entered into three conditional sale and purchase agreements to acquire 100 per cent. equity interests in Guangxi Guixing Expressway Investment and Construction Co., Ltd. (the 'Guixing Target'), Guangxi Guiwu Expressway Guiyang Section Investment and Construction Co., Ltd. (the 'Guiyang Target') and Guangxi Huatong Expressway Co., Ltd. (the 'Yangping Target'). Guixing Target owns the rights to operate the Guilin - Xing'an Expressway ('Guixing Expressway'). Guiyang Target owns the rights to operate the Guilin - Yangshuo Expressway ('Guiyang Expressway'). Yangping Target owns the rights to operate the Yangshuo - Pingle Expressway ('Yangping Expressway').


Pursuant to the sale and purchase agreement in relation to the acquisition of Yangping Expressway, the acquisition of Yangping Expressway was completed on 23 September 2015 and the financial results of Yangping Expressway have been consolidated to the Group's accounts as a subsidiary since then.

Notes to Income Statement


The Group currently operates six toll roads, among which Gui Liu Expressway and Gui Huang Highway are accounted for as joint ventures using the equity method. Toll revenue from these joint ventures is not included in Group revenue and contribution from them is mainly recognised below the operating level.


  1. Group revenue for the third quarter and nine months ended 30 September 2015 grew 4% and 6% respectively year-on-year. The increase in Group revenue was largely attributable to the revenue growth of Yongtaiwen Expressway, the consolidation of revenue contribution from Jiurui Expressway acquired in September 2014 and Yangping Expressway acquired in September 2015. Group gross profit for the third quarter and first nine months of 2015 increased 8% and 10% respectively mainly due to higher gross profit margin registered by Yongtaiwen Expressway and Beilun Port Expressway, higher gross profit contribution from Jiurui Expressway.


  2. Other operating income decreased mainly due to lower deferred income and effective interest on other receivables recognised, lower exchange gain and absence of negative goodwill of HK$22.8 million arising from the acquisition of subsidiaries.


  3. Share of results of joint ventures relates to the contributions from the Group's two toll roads, namely Gui Liu Expressway and Gui Huang Expressway. The details are set out in item 8.


  4. Income tax expense increased as a result of higher income tax expense registered by Yongtaiwen Expressway and Beilun Port Expressway and the consolidation of results of Jiurui Expressway.


(v) Additional disclosures



Group

Third quarter ended 30 September

Nine-month period ended 30 September

2015

2014

Change

2015

2014

Change

HK$'000

HK$'000

%

HK$'000

HK$'000

%


6,232


7,594


(18)


17,493


18,751


(7)

(129,097)

(119,581)

8

(392,179)

(354,478)

11

(5,410)

(6,258)

(14)

(17,002)

(18,897)

(10)

(700)

2

N.M.

(703)

(61)

1,052


-


(6)


(100)


-


(182)


(100)

-

22,783

(100)

-

22,783

(100)


-


-


-


-


66,319


(100)

(2,091)

3,655

N.M.

16,509

25,987

(36)

*Interest income


**Amortisation of intangible assets


Depreciation of property, plant and equipment


(Loss)/Gain on disposal of property, plant and equipment


Intangible assets written off


Bargain purchase gain arose from acquisition of subsidiaries


Gain on disposal of discontinued operation


***Foreign exchange gain/(loss)


*Interest income decreased due to lower bank fixed deposits.


**Amortisation expenses increased mainly due to consolidation of Jiurui Expressway and the increase in amortisation expenses by other toll road subsidiaries based on a units-of-usage basis.


***Foreign exchange loss arose from the depreciation of RMB and SGD against Hong Kong dollar.

1.(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year


Group

Company

As at 30/09/2015

As at 31/12/2014

As at 30/09/2015

As at 31/12/2014

HK$'000

HK$'000

HK$'000

HK$'000


ASSETS


3,636,676


1,049,178


1,461,590


124,070

Current assets

Cash and cash equivalents

Trade and other receivables

(i)

264,162

199,761

629,224

1,012,947

Inventories

1,306

970

-

-

Total current assets

3,902,144

1,249,909

2,090,814

1,137,017


Non-current assets


306,936


209,307


2,699


2,959

Property, plant and equipment

(ii)

Intangible assets

(iii)

13,839,522

12,429,096

-

-

Interests in subsidiaries

(iv)

-

-

9,651,599

7,813,732

Interests in joint ventures

1,578,329

1,702,466

-

-

Club membership

376

376

376

376

Total non-current assets

15,725,163

14,341,245

9,654,674

7,817,067

Total assets

19,627,307

15,591,154

11,745,488

8,954,084


LIABILITIES AND EQUITY


967,653


633,291


145,724


37,679

Current liabilities

Trade and other payables

(v)

Interest-bearing liabilities

(vi)

897,118

402,048

897,118

248,784

Dividend payable

(vii)

146,531

498,009

146,531

498,009

Income tax payable

(viii)

318,322

162,065

-

-

Total current liabilities

2,329,624

1,695,413

1,189,373

784,472


Non-Current liabilities


3,820,676


3,844,990


2,656,198


3,607,603

Interest-bearing liabilities

(vi)

Deferred income

141,377

160,002

-

-

Deferred tax liabilities

998,524

960,955

-

-

Total non-current liabilities

4,960,577

4,965,947

2,656,198

3,607,603


Capital, reserves and non-controlling interests


7,861,501


3,804,616


7,861,501


3,804,616

Share capital

Share option reserve

200

1,513

200

1,513

Statutory reserve

214,362

201,154

-

-

Currency translation reserve

95,834

483,068

-

-

Reserve on consolidation

(78,930)

(78,930)

-

-

Capital reserve

22,892

55,036

22,892

55,036

Accumulated profits

1,639,644

1,907,606

15,324

700,844

Equity attributable to owners of the company

9,755,503

6,374,063

7,899,917

4,562,009

Non-controlling interests

2,581,603

2,555,731

-

-

Total equity

12,337,106

8,929,794

7,899,917

4,562,009


Total liabilities and equity


19,627,307


15,591,154


11,745,488


8,954,084

distributed by