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Toll-road woes trim back China Merchants net

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Red chip China Merchants Holdings has signed agreements to acquire stakes in a toll road and a ports project after reporting a 10.5 per cent decline in net profit for the year to December 31.

Attributable profit last year was HK$704.47 million, down from HK$787.62 million a year earlier.

Turnover fell 9.9 per cent to HK$1.34 billion.

Profit from ports-related and manufacturing operations increased 17.8 per cent to HK$382.91 million and 26.8 per cent to HK$110.08 million, while its toll-road operation saw a profit decline of 43.2 per cent to HK$218.58 million. The board recommended a full dividend of 11 HK cents per share, up from eight HK cents in 1998.

Managing director Zhao Huxiang attributed the net profit fall to the company's failure to collect an outstanding payment of HK$220 million - part of its share of profits on its investment in the Guiliu Expressway in Guangxi province.

'If the HK$220 million was included in our bottom line, our net profit would have grown over 20 per cent from the previous year,' he said, indicating the company will strive to collect the money.

Under an agreement with its mainland partners, the firm was entitled to a minimum of HK$288 million of distributable profits last year.

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