THE KOWLOON MOTOR BUS HOLDINGS LIMITED
(incorporated in Bermuda with limited liability)
INTERIM REPORT 1999
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 JUNE 1999
Six months ended 30 June Note 1999 1998 HK$'million HK$'million Turnover 1 2,871.1 2,669.5 ========== ========== Other revenue 2 61.8 27.3 ========== ========== Operating profit 433.7 394.3 Financial expenses (67.2) (60.0) ---------- ---------- 366.5 334.3 Share of loss of jointly controlled entity (0.1) -- ---------- ---------- Profit before taxation 366.4 334.3 Taxation 3 (65.4) (46.6) ---------- ---------- Profit after taxation 301 287.7 Minority interest (0.1) (0.1) ---------- ---------- Profit attributable to shareholders 300.9 287.6 ========== ========== Earnings per share 4 74.6 cents 71.3 cents ========== ==========
Turnover comprises fares, trading receipts and other income derived from passenger transport operations, but excludes intra-group transactions.
2. Other revenue
Other revenue mainly comprises interest income earned during the period.
Hong Kong Profits Tax has been provided at the rate of 16% (1998 --- 16%) on the estimated assessable profits for the period.
4. Earnings per share
The calculation of earnings per share is based on the profit attributable to shareholders of HK$300,900,000 (1998 --- HK$287,600,000) and 403,639,413 shares in issue during the period (1998 --- 403,639,413 shares).
The Group's unaudited profit attributable to shareholders for the six months ended 30 June 1999 was HK$300.9 million (1998 --- HK$287.6 million). Earnings per share for the period amounted to 74.6 cents (1998 --- 71.3 cents). These represent an increase of 4.6% over the same period of 1998. The Group's results were mainly derived from the operation of franchised bus services.
The Board has declared an interim dividend of 28 cents per share (1998 --- 27 cents per share), totalling HK$113 million (1998 --- HK$109 million), for the year ending 31 December 1999. This interim dividend will be paid on 5 October 1999 to the shareholders who are on the Register of Members at the close of business on 30 September 1999. The Register will be closed from 27 September to 30 September 1999, both dates inclusive. To qualify for the interim dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company's Hong Kong share registrars, Central Registration Hong Kong Limited at Rooms 1901--1905, 19th Floor Hopewell Centre, 183 Queen's Road East, Hong Kong, not later than 4:00 p.m. on 24 September 1999.
The Kowloon Motor Bus Company (1933) Limited ("KMB")
Long Win Bus Company Limited ("LWB")
Sun Bus Limited ("SB")
Joint Venture Companies
APPOINTMENT OF CHAIRMAN
The Board is pleased to announce the appointment of the Honourable Sir Sze-Yuen Chung, GBM, GBE, PhD, FREng, JP as an independent Non-executive Director and as Chairman of the Company and of its subsidiary companies, KMB and LWB, with effect from 12 August 1999.
DEALINGS IN THE COMPANY'S LISTED SECURITIES
During the period, the Company and its subsidiaries did not purchase, sell or redeem any of the Company's own shares.
COMPLIANCE WITH THE CODE OF BEST PRACTICE
None of the Directors of the Company is aware of information which would reasonably indicate that the Company is, or was at any time during the six month period ended 30 June 1999, not in compliance with the Code of Best Practice as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, except that the independent Non-executive Directors of the Company are not appointed for a specific term but are subject to retirement by rotation and re-election at the Annual General Meeting in accordance with the Bye-Laws of the Company.
The Company has complied with the additional requirement to establish an audit committee with the scope of authority and responsibilities defined according to the guidance issued by the Hong Kong Society of Accountants.
YEAR 2000 COMPLIANCE
The Group is fully aware of the impact of the Year 2000 issue and has rigorously conducted contingency planning including scenario analyses and impact assessments. Appropriate actions have been taken, including the adoption of the Year 2000 conformity requirements issued by the British Standards Institution (DISC PD2000-1), i.e. neither performance nor functionality is affected by dates prior to, during and after the Year 2000. A Year 2000 compliance programme was implemented to address all critical areas. A project team led by a Year 2000 co-ordinator provided regular progress reports to the management. As at 30 June 1999, all relevant computer systems and applications that had not been Year 2000 compliant were converted. Business partners and major suppliers have also been requested to provide assurances that the Group is not exposed to risks arising from their Year 2000 non-compliance. In addition, contingency plans have been developed to minimize the potential impact on the Group's operations in exceptional circumstances. The aggregate costs for the Year 2000 modifications did not have a significant effect on the Group's operating results. As at 30 June 1999, there were no material commitments in respect of the Year 2000 modifications.
In the light of the present economic climate, KMB has recently declared that it will not apply for a fare increase in 1999. At the same time, salaries and wages for KMB's employees will be contained at the current level. The Group will seek to increase its return by rationalising its bus route network, improving its productivity and exploring new business opportunities, both locally and in Mainland China. With the steady revival of Hong Kong's economic conditions and the continuous development of various new towns in the New Territories, we are confident that there is plenty of room for the business growth of the Group. With a firm commitment to efficient, convenient and high quality transport services, the Group strives to maintain its position as a world class transport industry leader.
S. Y. Chung
Hong Kong, 9 September 1999
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