CKI HOLDINGS(01038)2023-08-16 08:59Financial Performance - For the six months ended June 30, 2023, the company recorded a profit attributable to shareholders of HKD 4,239 million, a decrease of 4% year-on-year[10]. - The earnings per share for the period was HKD 1.68, and the interim dividend declared was HKD 0.71 per share, representing a 1.4% increase from the previous year[11]. - The contribution from Power Assets was HKD 1,066 million, an increase of 3% compared to the same period last year[12]. - The UK infrastructure business contributed HKD 1,592 million, down 5% year-on-year, affected by regulatory resets and currency fluctuations[13]. - Australia's infrastructure business reported a profit contribution of HKD 826 million, a decrease of 18% year-on-year, primarily due to regulatory resets affecting AGN and Multinet Gas, a one-time gain from United Energy last year, and a weak AUD to HKD exchange rate[15]. - The profit contribution from the European infrastructure business was HKD 424 million, down 1% year-on-year, impacted by a weak Euro and rising financial costs; in local currency, the profit contribution remained stable compared to the previous year[16]. - Canada's infrastructure business saw a profit contribution of HKD 402 million, an increase of 31% year-on-year, driven by strong performance from Canadian Power and Park'N Fly, with a 40% increase in local currency[17]. - New Zealand's infrastructure business reported a profit contribution of HKD 72 million, down 5% year-on-year, attributed to a weak NZD to HKD exchange rate; in local currency, the profit contribution increased by 2%[18]. - The profit contribution from Hong Kong and mainland China was HKD 102 million, a decrease of 13%, due to reduced traffic on toll roads in mainland China and declining sales in Hong Kong's cement business[19]. - Revenue for the six months ended June 30, 2023, was HKD 19,534 million, a decrease of 2.7% compared to HKD 20,079 million in 2022[39]. - Profit attributable to shareholders for the same period was HKD 4,239 million, down 3.9% from HKD 4,409 million in 2022[39]. - Earnings per share decreased to HKD 1.68 from HKD 1.75, reflecting a decline of 4%[39]. - Total comprehensive income for the period was HKD 8,368 million, an increase of 15.4% compared to HKD 7,252 million in 2022[40]. Dividends and Shareholder Returns - The interim dividend will be distributed on September 13, 2023, to shareholders registered by September 4, 2023[11]. - The company paid dividends amounting to HKD 4,611 million during the six months ended June 30, 2023, compared to HKD 4,560 million in the same period of 2022[43]. - The interim dividend declared was HKD 0.71 per share, an increase from HKD 0.70 per share in the same period of 2022, totaling HKD 1,789 million compared to HKD 1,764 million[56]. Financial Position and Capital Management - The group maintained a strong financial position with cash holdings of HKD 12 billion and a net debt to total capital ratio of 9% as of June 30, 2023, allowing for ample financial resources to seek new growth opportunities[19]. - As of June 30, 2023, the total cash and deposits of the group amounted to HKD 12.05 billion, while the total loans were HKD 25.67 billion, including HKD 2.67 billion in HKD loans and HKD 22.93 billion in foreign currency loans[22]. - The net debt to total net capital ratio was 9% as of June 30, 2023, slightly higher than the 7% level at the end of 2022, calculated based on net debt of HKD 13.55 billion and total net capital of HKD 146.47 billion[22]. - The group has a total nominal amount of derivative instruments of HKD 53.61 billion as of June 30, 2023, to hedge against interest rate risks[22]. - The group has pledged certain assets to secure bank loans totaling HKD 1.55 billion as of June 30, 2023[23]. - The group maintains a prudent treasury policy to manage risks and reduce funding costs, with all treasury matters centralized at the head office[22]. - 9% of the loans are due in 2023, while 91% are due between 2024 and 2027[22]. - The group regularly reviews its cash flow and financing status to seek financing arrangements in response to new investment projects or loan repayment periods[22]. Operational Performance and Strategic Initiatives - The company continues to focus on enhancing operational performance across various business sectors and markets[12]. - The company is actively developing the Revolution Very Light Rail (RVLR) light rail train and is in the final planning stages for constructing a simulation train[14]. - The company expects stable performance in its UK Rails segment for the first half of 2023[14]. - The group is actively pursuing sustainable development initiatives, including hydrogen projects and carbon capture, with significant government funding for projects like Hydrogen Park Murray Valley and Gladstone[15][20]. - The group’s growth strategy is based on prudent financial management, balancing continuous development with maintaining an ideal debt level[21]. - The outlook remains cautious due to global uncertainties, but the group’s regulated business revenues are linked to inflation, providing resilience against current high inflationary pressures[21]. Governance and Leadership - The company has maintained a strong leadership team with extensive experience in finance and risk management, including executives with over 39 years of experience in accounting and financial management[30][32][33]. - The company continues to focus on sustainable development and risk management, leveraging the expertise of its board members in these areas[30][31]. - The board includes independent directors with significant experience in corporate governance and financial oversight, ensuring robust compliance and accountability[32][33]. - The company has a diverse board composition, with members holding advanced degrees and professional qualifications in finance, law, and management[30][31][32]. - The company has been involved in significant corporate governance practices, including audit and remuneration committees, to ensure transparency and ethical management[32][33]. - The company emphasizes the importance of sustainable practices in its operations, aligning with global trends towards environmental responsibility[30][31]. Risks and Challenges - The ongoing global economic challenges include high inflation, rising interest rates, and geopolitical tensions, which may impact the group's business and financial performance[93]. - The company is exposed to risks related to high transmissibility diseases, which could adversely affect its operations and financial results[94]. - Currency fluctuations pose a risk to the group's financial performance, as operations span multiple countries with different currencies[102]. - Cybersecurity risks are increasing, with potential threats to the group's operations and reputation, despite no significant damages reported to date[103][104]. - Labor market changes, including low unemployment and rising inflation, create uncertainty in labor supply and costs[105]. - Supply chain disruptions due to geopolitical tensions have led to increased costs and unpredictable delivery times, particularly affecting local operations[106]. - The potential risks associated with Brexit may impact trade intensity, labor supply, supply chains, and exchange rates, affecting profitability[107]. - The company operates through non-wholly owned subsidiaries, joint ventures, and strategic alliances, which may affect its business and financial performance due to potential inconsistencies in goals with partners[108]. - Economic sanctions imposed by governments and international organizations may impact the company's operations and relationships with partners, suppliers, and customers, potentially leading to significant financial losses[109]. - Local, national, and international regulatory changes may significantly impact the company's business operations and financial performance, leading to increased operational and capital expenditures[111]. - The company is subject to risks associated with compliance with data protection laws, which may result in regulatory actions or civil claims if not adhered to, potentially harming its financial status[112]. - Climate change poses medium to long-term risks to the company's assets and operations, potentially disrupting supply chains and causing financial damage due to extreme weather events[115]. - The company acknowledges significant advantages from its relationship with CK Hutchison Holdings, but this also involves related party transactions that require compliance with the Hong Kong Stock Exchange rules[114].