ANNOUNCEMENT OF RESULTS
Consolidated Profit And Loss Account
For The Year Ended 31 December 1997
Notes:--
The Kowloon Motor Bus Holdings Limited ("the Company") was incorporated in Bermuda on 20 August 1997 and became the new holding company of The Kowloon Motor Bus Company (1933) Limited Group ("the Group") pursuant to a Scheme of Arrangement ("the Scheme") which became effective on 18 November 1997. Under the Scheme, the shares of The Kowloon Motor Bus Company (1933) Limited ("KMB(1933)") were cancelled and its original shareholders were issued the same number of the Company' shares of HK$1 each. The Group has been treated as a continuing entity and accordingly the consolidated accounts have been prepared on the basis that the Company was the holding company of the Group for both years presented, rather than from the effective date of the Scheme. In the opinion of the Directors, the above basis of preparation would provide a more meaningful view of the results and state of affairs of the Group as a whole for the year ended 31 December 1997.
Hong Kong Profits Tax has been provided at the rate of 16.5% on the estimated assessable profits for the year. No provision for deferred taxation has been made as the Directors consider that no liability would be likely to arise as a result of the reversal of timing differences in the foreseeable future.
The calculation of earnings per share is based on profit attributable to shareholders of HK$550,798,000 (1996 - HK$527,743,000) and 403,639,413 ordinary shares in issue during the years.
Results
The Group's profit attributable to Shareholders for the year ended 31 December 1997 was HK$550.8 million (1996 - HK$527.7 million), representing an increase of 4.4 per cent over the previous year. Earnings per share for the year amounted to HK$1.36 (1996 - HK$1.31). The Group's profit was mainly derived from its franchised bus operations. Contribution from non-franchised bus operations to the Group was insignificant during the year.
The Kowloon Motor Bus Company (1933) Limited ("KMB(1933)")
The profit from franchised bus operations of KMB(1933) for the year, after the transfer of HK$0.2 million from the Development Fund (1996 - HK$1.8 million), amounted to HK$556.0 million (1996 - HK$525.5 million), representing an increase of 5.8 per cent over the previous year.
In the year under review, revenue and operating costs related to franchised bus operations increased by 8.8 per cent and 9.2 per cent respectively as compared with the previous year. The increase in revenue was mainly due to the introduction of new bus routes, a rise in the number of passengers carried during the year and an increase in fares by an average of 7 per cent from 1 December 1997. The increase in operating costs was mainly due to a rise in salaries, wages and other staff costs. A pay increase of 6.9 per cent was granted to all daily-rated employees with effect from 1 June 1997, and to all monthly-rated employees with effect from 1 September 1997.
In 1997, a total of 1,051 million passengers (1996 - 1,032 million) rode on KMB(1933) buses, amounting to a daily average of 2.88 million passengers (1996 - 2.82 million). This represented an increase of 2.1 per cent in the daily average number of passengers as compared with the previous year. The actual distance travelled by KMB(1933) buses totalled 301 million kilometres (1996 - 285 million kilometres). The increase in patronage and distance travelled was primarily due to the introduction of additional routes as well as improved frequencies on certain routes.
Long Win Bus Company Limited ("LWB")
LWB was granted a franchise by the Government in October 1996 to operate a network of 12 bus routes (subsequently increased to 13 routes) for North Lantau and the new airport at Chek Lap Kok. The first bus route, Route E31 which plies between Tung Chung Town Centre and Tsuen Wan, commenced operation on 1 June 1997. Another route, E32, which runs between Kwai Fong MTR Station and Chek Lap Kok, started operation on 30 December 1997. Both routes were well-received by the public. In 1997, a total of 2.88 million passengers rode on LWB's buses, amounted to a daily average of 13,500 passengers. The actual distance travelled by LWB's buses totalled 1.43 million kilometres. LWB's profit attributable to shareholders for the year ended 31 December 1997 was HK$1.5 million.
Dividends
At the forthcoming Annual General Meeting to be held on 11 June 1998, the Directors will recommend the payment to Shareholders registered on that date a final dividend of 82 cents per share (1996 - 80 cents per share), totalling HK$331.0 million (1996 - HK$322.9 million), for the year ended 31 December 1997. Together with the interim dividend of 26 cents per share (1996 - 24 cents per share), totalling HK$104.9 million (1996 - HK$96.9 million) paid on 9 October 1997, dividends for the year ended 31 December 1997 will amount to HK$1.08 per share (1996 - HK$1.04 per share), totalling HK$435.9 million (1996 - HK$419.8 million). Subject to the approval of Shareholders at the forthcoming Annual General Meeting, the final dividend will be payable on 12 June 1998.
The Transfer Books of the Company will be closed from 1 June 1998 to 11 June 1998, both dates inclusive. To qualify for the proposed final dividend, transfers must be lodged with the Company's Share Registrars, Central Registration Hong Kong Limited of 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong by not later than 4:00 p.m. on 29 May 1998.
Purchase, Sale or Redemption of the Company's Listed Securities
No purchase, sale or redemption of the Company's own shares were made by the Company during the year.
By Order of the Board
John C.Y. Choy
Secretary
Hong Kong, 16 April 1998.
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