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CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED INTERIM REPORT FOR 2000

Growth and Globalisation with a Solid Foundation


17 August, 2000 -- Hong Kong

INTERIM RESULTS

Cheung Kong Infrastructure Holdings Limited ("CKI") has emerged as a global infrastructure player as it steps into the 21st century. CKI is making good progress with our diversification and globalisation initiatives in line with the strategy outlined in our latest Annual Report.

The net profit for the first six months ended 30th June, 2000 was HK$1,389 million. Earnings per share were HK$0.62 (1999: HK$0.60).

In light of CKI's healthy financial position and strong recurrent cash inflow, the Board of Directors has declared an interim dividend for 2000 of HK$0.20 per share (1999: HK$0.13), up 54 per cent. over the same period last year. The interim dividend will be paid on Thursday, 12th October, 2000 to shareholders whose names appear on the Register of Members on Wednesday, 11th October, 2000.

CKI Energy

The Energy business reported strong 28 per cent. contribution growth for the first half of this year, and continues to be the business sector with the largest contribution to the Group's profit. Much of this growth was attributable to new contributions from our interests in ETSA and Envestra Limited ("Envestra") in Australia.

In less than 12 months, CKI, together with Hongkong Electric Holdings Limited ("HKE"), made two major acquisitions in Australia - the first being the acquisition of ETSA which has the right to operate electricity distribution in the state of South Australia for a period of 200 years; and the second being the purchase of Powercor Australia Limited ("Powercor"), an electricity distribution and retail operation in the state of Victoria. These two acquisitions, which amount to HK$27 billion in investment, will make CKI/HKE the largest electricity distributor in Australia, serving over 1.3 million customers. ETSA has been making a contribution during the period under review with a performance better than projected. Powercor will start making a contribution after the scheduled completion in the middle of September 2000.

Our RMB 1.4 billion equity investment in Zhuhai Power Plant will be bringing in revenue this year as the plant is becoming operational.

CKI Transportation

CKI Transportation reported contribution growth at 2 per cent. for the period under review. This is a reflection of organic growth.

The Guangzhou East-South-West Ring Road project was completed nearly a year ahead of schedule and became fully operational on 26th June, 2000. With an investment amount of RMB 2 billion, it is expected that this investment will become one of CKI Transportation's important revenue contributors.

Growth of the transportation business is expected to improve in the coming months based on continuing organic growth, as well as new contributions from the Guangzhou East-South-West Ring Road.

CKI Materials

Challenging market conditions during the first half of 2000 affected turnover in the materials business. Further erosion of prices in the materials industry dampened performance of CKI Materials during the period under review, resulting in a 28 per cent. drop in contribution from this business area.

During the period under review, as part of our globalisation initiatives, CKI acquired a 65 per cent. stake in Polyphalt Inc., a Canadian-listed company engaged in the development and commercialisation of polymer modified asphalt products. Following this acquisition, CKI Materials now have operations in Hong Kong, Mainland China, Philippines and Canada.

Outlook

Business has been quick to react with an increasingly global focus as technology breaks down the barriers of space and time. "Growth and Globalisation with a Solid Foundation" will continue to be CKI's expansion strategy.

CKI is now a leading infrastructure player in its major markets of Hong Kong, Mainland China and Australia, as a result of our globalisation strategy.

With HK$10 billion investments to date in Mainland China and over 90 per cent. of our portfolio of PRC projects being operational, it is expected that there will be improved steady income from the PRC portfolio in the next few years.

The Envestra, ETSA and Powercor investments in Australia have brought our investment in Australia to HK$14 billion, making Australia home to CKI's largest investment outside of Hong Kong. These investments have also expanded our industry expertise from power generation to distribution and from electricity to gas. We will carry on examining opportunities in energy businesses globally in pursuit of this strategy.

Industry-wise, we are also continuing to explore opportunities in electronic infrastructure and environmentally-friendly industries. Our recently formed partnership with Israeli-based, German-listed On Track Innovations Limited, has given rise to an Asia Pacific-wide initiative for the implementation of smart card technology.

At present, we have dedicated teams identifying and evaluating promising projects around the world in four regions namely Asia, Australia, North America and Europe. With our strong financial foundation, we are confident that we are well placed to secure attractive investment projects with solid returns.

These are exciting times for CKI as we expand into the global arena. Our recent moves towards globalisation and diversification are making CKI a global player in the infrastructure sector.

I would like to thank the Board of Directors and our staff for their hard work and dedication. I would also like to thank our shareholders for their continued support of our vision.

Li Tzar Kuoi, Victor

Chairman

Hong Kong, 17th August, 2000

PURCHASE, SALE OR REDEMPTION OF SHARES

The Company has not redeemed any of its shares during the six months ended 30th June, 2000. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's shares during this period.

CONSOLIDATED INCOME STATEMENT
for the six months ended 30th June 2000

The unaudited consolidated income statement for the six months ended 30th June 2000 and the comparisons with last year are set out below:


Year ended
31st December
(audited)

   
Six months ended
30th June
(unaudited)
   1999    HK$ million Notes 2000 1999

  3,063   Turnover 1 1,540 1,461

  1,331   Operating profit 596 666
  2,004   Share of results of associates 850 763
  49   Share of results of jointly controlled entities   42 19

  3,384   Profit before taxation 1,488 1,448
  (245)   Taxation 2 (106) (90)


  3,139   Profit after taxation 1,382 1,358
  2   Minority interests 7 -

 
  3,141   Profit attributable to shareholders 1,389 1,358
  (947)   Dividends (451) (293)

  2,194   Profit for the period retained 938 1,065

 
  HK$1.39   Earnings per share

3

HK$0.62 HK$0.60
  HK$0.42   Dividends per share   HK$0.20 HK$0.13

Notes:

1.   Turnover
    Turnover represents net sales from infrastructure materials businesses, return on investments and interest income received and receivable from infrastructure project investments, net of withholding tax, where applicable.
     
2.   Taxation
   
Year ended
31st December
  Six months ended
30th June
   1999    HK$ million 2000 1999

      Company and Subsidiaries
  59   Hong Kong profits tax - current 19 18
  1     - deferred (2) 2

  60       17 20

    Associates
  182   Hong Kong profits tax - current 89 70
  3     - deferred - -

  185     89 70

  245   Total 106 90

     
   
(a)  Hong Kong profits tax is provided for at the rate of 16 per cent. (1999: 16 per cent.) on the estimated assessable profits for the period less available tax relief for losses brought forward.
   
(b) Tax deferred or accelerated by the effects of timing differences is provided, using the liability method, to the extent that it is probable that a liability or an asset will crystallise in the foreseeable future.
     
3.   Earnings per share
    The calculation of earnings per share is based on the profit attributable to shareholders of HK$1,389 million (1999: HK$1,358 million) and on 2,254,209,945 shares (1999: 2,254,209,945 shares) in issue during the period.

 

CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED
NOTICE OF PAYMENT
OF INTERIM DIVIDEND, 2000

The Board of Directors of Cheung Kong Infrastructure Holdings Limited announces that the Group's unaudited consolidated profit attributable to shareholders for the six months ended 30th June, 2000 amounted to HK$1,389 million which represents earnings of HK$0.62 per share. The Directors have resolved to pay an interim dividend for 2000 of HK$0.20 per share to shareholders whose names appear on the Register of Members of the Company on Wednesday, 11th October, 2000. The dividend will be paid on Thursday, 12th October, 2000.

The Register of Members of the Company will be closed from Wednesday, 4th October, 2000 to Wednesday, 11th October, 2000, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the interim dividend, all share certificates with completed transfer forms either overleaf or separately, must be lodged with the Company's Branch Share Registrars, Central Registration Hong Kong Limited, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, not later than 4:00 p.m. on Tuesday, 3rd October, 2000.

By Order of the Board
Eirene Yeung
Company Secretary

Hong Kong, 17th August, 2000


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