Annual Report 2019

088 Transport International Holdings Limited 2019 Annual Report Financial Review The profit after taxation of LWB for 2019 was HK$53.7 million, representing an increase of HK$16.9 million or 45.9% compared with HK$36.8 million for 2018. LWB’s fare revenue for 2019 was HK$638.1 million, an increase of HK$78.3 million or 14.0% compared with HK$559.8 million for 2018. The increase was mainly due to the continuous growth of A-route passengers in the first half of 2019 as a result of the increase in transport demand within the A-route network as well as the additional inflow of visitors following the opening of the Hong Kong- Zhuhai-Macao Bridge in late October 2018. However, such growth became stagnant in the second half of 2019 as a result of the social unrest. LWB recorded a total ridership of 45.8 million passenger trips (a daily average of 125,500 passenger trips) for 2019, as compared with 41.5 million passenger trips (a daily average of 113,700 passenger trips) for 2018. Other income for 2019 included a fuel subsidy of HK$13.0 million from the Government. Total operating expenses for 2019 amounted to HK$594.1 million, an increase of HK$73.7 million or 14.2% compared with HK$520.4 million for 2018. The increase in operating expenses was mainly due to the increase in staff costs as a result of the annual pay rise and the improvement in benefit packages, as well as the increase in depreciation charges resulting from continued investment in new buses with enhanced safety features. Non-franchised Transport Operations The Group’s Non-franchised Transport Operations Division reported a profit after taxation of HK$39.8 million for 2019, representing a decrease of HK$8.5 million or 17.6% compared with HK$48.3 million for 2018. A review of the operations of the principal business units in this Division is set out as follows: Sun Bus Holdings Limited and its Subsidiaries (the “SBH Group”) The SBH Group is a leading non-franchised bus operator in Hong Kong. With Sun Bus Limited as its flagship company, the SBH Group provides customised transport services to a wide range of customers, including large residential estates, shopping malls, major employers, travel agents and schools, as well as the general public through chartered hire services. The revenue of the SBH Group for 2019 decreased by 8.2% compared with 2018 mainly due to the social unrest which affected the local transport services business. Total operating expenses for 2019 decreased by 8.1% compared with 2018, which was in line with the decline in revenue. In 2019, the SBH Group purchased 16 (2018: 84) Euro VI buses for fleet replacement purposes. As at 31 December 2019, the SBH Group had a fleet of 390 buses (2018: 390 buses). New Hong Kong Bus Company Limited (“NHKB”) NHKB jointly operates with its Shenzhen ( 深圳 ) counterpart a direct, economical, 24-hour cross-boundary shuttle bus service (commonly known as the “Huang Bus” service) serving regular commuters and holiday travellers between Lok Ma Chau in Hong Kong and Huanggang ( 皇崗 ) in Shenzhen. The revenue of NHKB decreased by HK$8.3 million or 17.3% from HK$48.0 million in 2018 to HK$39.7 million in 2019 mainly due to the increase in choices for cross-boundary services as well as the social unrest. As at 31 December 2019, NHKB had a fleet of 15 buses (2018: 15 buses). Property Holdings and Development The Group’s Property Holdings and Development Division reported a profit after taxation of HK$54.8 million for 2019, representing an increase of HK$0.9 million or 1.7% compared with HK$53.9 million for 2018. A review of the Group’s investment properties is set out as follows: LCK Commercial Properties Limited (“LCKCP”) LCKCP, a wholly-owned subsidiary of the Group, is the owner of “Manhattan Mid-town”, the commercial complex of Manhattan Hill. The 50,000 square feet shopping mall has provided Manhattan Hill residents and other shoppers with high quality retail facilities since its opening in March 2009. As at 31 December 2019, the entire lettable area of the shopping mall was leased out, generating a stream of recurring rental income for the Group. As at 31 December 2019, the carrying value of the shopping mall (classified as investment property on the consolidated statement of financial position), stated at cost less accumulated depreciation and impairment losses, amounted to HK$76.0 million (2018: HK$78.3 million).