CHEUNG KONG INFRASTRUCTURE
ANNOUNCES 1998 RESULTS
THE CHAIRMAN'S LETTER
Solid Prospects Solid Growth
TO OUR SHAREHOLDERS
We are pleased to report that Cheung Kong Infrastructure
Holdings Limited ("CKI") reported satisfactory growth in 1998.
Net profit for the year ended
The Board of Directors is recommending a final dividend of
HK$0.26 per share. Together with the interim dividend of HK$0.12
per share, this will bring the total dividend for the year
to HK$0.38 per share, a 19 per cent. increase from the HK$0.32
per share paid in respect of last year. The proposed dividend
will be paid on 14th May, 1999 following approval at the Annual
General Meeting, to shareholders whose names appear on the
Register of Members on
While the general economic slowdown and tight credit situation in 1998 have put pressure on many companies, this environment has also presented opportunities to those with a solid foundation and financial position to gain a stronger market position. In the case of CKI:
Solid growth in profit contribution was recorded in all of the three core businesses:
|2.||Our infrastructure projects in the Mainland reported an increase of 58 per cent. in profit contribution. Our PRC portfolio is entering a mature phase, with the majority of the projects contributing in 1998.|
|3.||Hongkong Electric Holdings Limited ("Hongkong Electric") reported a net profit increase of 5.5 per cent., on the back of a 6.8 per cent. increase in electricity sales.|
|4.||CKI Materials produced satisfactory results in a challenging environment. Despite keen market competition, our continued progress in cost control and improved productivity combined to sustain higher profits.|
Our financial position has remained solid. As at the end of 1998, the Group's net debt to equity ratio was 8.7 per cent., with cash on hand of HK$1.331 billion and debt of HK$3.1 billion.
China's economic growth in the past year has been, to a large extent, driven by infrastructure investment. Through the domestic banking and capital markets, 1998 saw a continuing increase in funding for infrastructure development, which has received the priority of the various levels of PRC government. The Group can only benefit from a more robust infrastructure market which is still in the high growth stage of development. The commitment to infrastructure spending can also be witnessed in Hong Kong where the government has affirmed its intention to speed up the investment process.
We are looking forward to the new year with confidence. Our core businesses, which have been constantly tested by the difficult economic conditions, have delivered solid results. With the completion of major commercial buildings, Hongkong Electric's growth prospects will continue to be steady. Given strong market positions and an efficient cost structure, CKI Materials is well positioned to benefit from the increased spending in public housing and infrastructure in Hong Kong. With the majority of projects becoming operational, our infrastructure portfolio in China has matured, and is poised to report continued growth. We are confident that the internal growth of all of the core businesses will continue.
Our financial strengths are building up at a time when asset values across the region have been deflating. Many attractive opportunities in the infrastructure sector have arisen in the wake of the regional financial turmoil. We will rigorously pursue quality projects by applying a disciplined approach.
In a particularly challenging environment, I would like to thank the Board of Directors for its sound guidance and all employees for their hard work and dedication.
Li Tzar Kuoi, Victor
Hong Kong, 18th March, 1999
PURCHASE, SALE OR REDEMPTION OF SHARES
The Company has not redeemed any of its shares during the year. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's shares during the year.
The Group's Year 2000 compliance programme involves testing and assessing all major systems for their Year 2000 compliance. Third parties including suppliers, service providers and business partners have been asked to confirm their status and progress of Year 2000 compliance.
The Group is aiming for its major systems to be Year 2000 compliant by mid 1999. The overall progress of the programme is on schedule.
More details on the Group's Year 2000 compliance programme will be set out in the 1998 Annual Report.
CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED
1998 RESULTS ANNOUNCEMENT
SUMMARY OF AUDITED RESULTS
for the year ended 31st December
|Share of results of associated
|Share of results of jointly
|Profit before taxation||3,126||2,696|
|Profit after taxation||2,853||2,413|
|Profit attributable to
|Profit for the year retained||1,998||1,690|
|Earnings per share||
|Dividends per share|
|Turnover represents net sales from infrastructure materials businesses and return on investments and interest income received and receivable from other infrastructure investments in the Mainland, net of withholding tax, where applicable.|
|2.||Share of Results of Jointly Controlled Entities|
|The Group's share of results of jointly controlled entities are accounted for in accordance with the Statement of Standard Accounting Practice No.21 "Accounting for Interests in Joint Ventures" issued by the Hong Kong Society of Accountants which become effective from 1st January, 1998. The adoption has no effect on the Group's profit attributable to shareholders or reserves. However, the Group's share of results of jointly controlled entities are required to be disclosed separately and certain comparative figures have been reclassified to conform with the current year's presentation.|
|4.||Earnings per share|
|The calculation of earnings per share is based on the profit attributable to shareholders of HK$2,855 million (1997: HK$2,411 million) and on 2,254,209,945 shares (1997: weighted average of 2,089,107,818 shares) in issue during the year.|
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of the Company will be held at the Ballroom, 1st Floor, Harbour Plaza Hong Kong, 20 Tak Fung Street, Hunghom, Kowloon, Hong Kong on Thursday, 13th May, 1999 at 12:15 p.m. for the following purposes:
|1.||To receive and consider the audited Financial Statements, the Group Managing Director's Report and the Reports of the Directors and Auditors for the year ended 31st December, 1998.|
|2.||To declare a final dividend.|
|3.||To elect Directors.|
|4.||To appoint Auditors and authorise the Directors to fix their remuneration.|
|5.||To consider and, if thought fit, pass with or without amendments, the following resolutions as Ordinary Resolutions:|
|By Order of the Board
Hong Kong, 18th March, 1999