CK Infrastructure Holdings Limited
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Financial Review


Financial Resources, Treasury Activities And Gearing Ratio

The Group's capital expenditure and investments were funded from cash on hand, internal cash generation, loans, notes, bonds, share placement and other project loans.

As at 30th June, 2022, cash and bank deposits on hand amounted to HK$9,591 million and the total borrowings of the Group amounted to HK$28,621 million, which included Hong Kong dollar borrowings of HK$2,673 million and foreign currency borrowings of HK$25,948 million. Of the total borrowings, 74 per cent were repayable between 2023 and 2026 and 26 per cent were repayable beyond 2026. The Group's financing activities continue to be well received and fully supported by its bankers.

The Group adopts conservative treasury policies in cash and financial management. To achieve better risk control and minimise the cost of funds, the Group's treasury activities are centralised. Cash is generally placed in short-term deposits mostly denominated in U.S. dollars, Hong Kong dollars, Australian dollars, New Zealand dollars, British pound or Renminbi. The Group's liquidity and financing requirements are reviewed regularly. The Group will continue to maintain a strong capital structure when considering financing for new investments or maturity of bank loans.

As at 30th June, 2022, the Group maintained a net debt position with a net debt to net total capital ratio of 12.9 per cent. This was based on HK$19,030 million of net debt and HK$147,350 million of net total capital, which represents the total borrowings plus total equity net of cash and bank deposits. This ratio was lower than that of 14.7 per cent at the year end of 2021, mainly attributable to the cash inflows from the investment portfolios.

To minimise currency risk exposure in respect of its investments in other countries, the Group generally hedges those investments with (i) currency swaps and (ii) the appropriate level of borrowings denominated in the local currencies. The Group also entered into certain interest rate swaps to mitigate interest rate risks. As at 30th June, 2022, the notional amounts of these derivative instruments amounted to HK$58,707 million.

Charge On Group Assets

As at 30th June, 2022, certain assets were pledged to secure bank borrowings totalling HK$1,360 million granted to the Group.

Contingent Liabilities

As at 30th June, 2022, the Group was subject to the following contingent liabilities:

HK$ million  
Guarantee in respect of bank loan drawn by an affiliated company 581
Other guarantee given in respect of an affiliated company 315
Performance bond indemnities 165
Sub-contractor warranties 14
Total 1,075

Employees

The Group, including its subsidiaries but excluding affiliated companies, employs a total of 2,352 employees. Employees' cost (excluding directors' emoluments) amounted to HK$490 million. The Group ensures that the pay levels of its employees are competitive and that its employees are rewarded on a performance related basis within the general framework of the Group's salary and bonus system.

Preferential subscription of 2,978,000 new shares of the Company was given to those employees who had subscribed for shares of HK$1.00 each in the Company at HK$12.65 per share on the flotation of the Company in 1996. The Group does not have any share option scheme for employees.

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