Annual Report 2019

082 Transport International Holdings Limited 2019 Annual Report Financial Review Total operating expenses for 2019 amounted to HK$7,813.3 million, an increase of HK$423.6 million or 5.7% compared to HK$7,389.7 million for 2018. The increase was mainly due to the increase in staff costs of HK$338.2 million as a result of annual pay rise and the improvement in benefit packages. The Group’s share of profits of associates for 2019 amounted to HK$21.5 million, a decrease of HK$2.3 million or 9.7% compared to HK$23.8 million for 2018. Income tax expense for the year amounted to HK$94.0 million (2018: HK$117.2 million). The breakdown of the income tax expense is set out in note 6 to the financial statements on page 176 of this Annual Report. More detailed information in respect of the Group’s individual business units is set out on pages 87 to 91 of this Annual Report. Dividend The Board has recommended an ordinary final dividend of HK$0.70 per share (2018: HK$0.90 per share). Subject to the approval of the shareholders at the Annual General Meeting of the Company to be held on 21 May 2020 or at any adjournment thereof, the proposed final dividend, together with the interim dividend of HK$0.30 per share (2018: HK$0.30 per share) paid in October 2019, would result in a total dividend of HK$1.00 per share for 2019 (2018: HK$1.20 per share). Key Changes to Financial Position Capital Expenditure As at 31 December 2019, the Group’s investment properties, investment property under development, interest in leasehold land and other property, plant and equipment (comprising buildings, buses and other motor vehicles, buses under construction, tools and others) amounted to HK$10,154.4 million (2018: HK$9,840.5 million). The increase was mainly due to the development of the Kwun Tong site and purchase of new buses by KMB and LWB for fleet replacement as well as service enhancements during the year. None of the assets were pledged or charged as at 31 December 2019. The breakdown of the capital expenditure is shown in note 13 to the financial statements on pages 185 to 192 of this Annual Report. Intangible Assets and Goodwill As at 31 December 2019, the Group’s intangible assets and goodwill amounted to HK$365.0 million (2018: HK$360.6 million) and HK$84.1 million (2018: HK$84.1 million) respectively. The intangible assets mainly represent passenger service licences and transport operating rights of the Group’s non-franchised transport operations. Current Assets and Current Liabilities The Group’s total current assets as at 31 December 2019 amounted to HK$2,931.3 million (2018: HK$1,891.1 million), mainly comprising liquid funds of HK$1,455.9 million (2018: HK$1,181.0 million) and accounts receivable of HK$666.7 million (2018: HK$371.1 million). The increase in accounts receivable was mainly due to the subsidies to be received from the Government. The Group’s liquid funds as at 31 December 2019 were mainly denominated in Hong Kong dollars. Total current liabilities as at 31 December 2019 amounted to HK$1,557.0 million (2018: HK$1,179.8 million), which mainly included accounts payable and accruals. The increase in accounts payable and accruals was mainly due to the setup of Toll Exemption Fund. Capital Expenditure 2019 HK$742 million (58%) HK$21 million (2%) HK$281 million (22%) HK$231 million (18%) 2018 HK$10 million (1%) HK$1,124 million (75%) HK$282 million (19%) HK$79 million (5%) 2018 2019 Investment property under development Buses and other motor vehicles Buildings Others