Chairman's Statement
Operating Results
The Group's consolidated net profit after tax for 1983 was $31.7 million as compared with $34.7 million for 1982, a decrease of 8.6% over the previous year. This was mainly due to: 1. Full year effect in 1983 of the opening of
the Tsuen Wan extension of Mass Transit Railway in May 1982 resulting in further loss of passengers and revenue. 2. Increased operating costs due to inflation and fluctuation in Hong Kong Dollars. 3. Decrease in subsidy for Student Travel
Scheme from Government which was based on a percentage of passengers carried. The contribution to Group profit from the different sectors of your Group of Companies' activities is set out in page 21 of this Annual Report.
Your Directors have recommended a final dividend of 10 cents per share which together with the interim dividend paid, make a total distribution of 15 cents per share which is the same as for 1982.
Members registered in the Company's Share Register on the 21st March 1984 will be entitled to the above distribution.
The earnings per share was 22.9 cents as compared with 25.6 cents per share for 1982.
Traffic
Traffic carried on your ferries during 1983 compared with 1982 are as follows:- Cross Harbour Routes
64.6 million passengers, a decrease of 13.9% or 10.4 million passenger journeys. 3.3 million vehicles as against 3.6 million vehicles, a decrease of 8.3%. Outlying Districts Routes
19.1 million passengers, a decrease of 14.7% or 3.3 million passenger journeys. The general decrease in passenger traffic was attributed to increased competition from the Mass Transit Railway and to people spending less on recreation during times of recession. The drop in the number of vehicles carried is also attributed to a slow down in the economy and to reduction in the number of vehicles licensed after licence fees and fuel taxes were sharply increased.
Fleet
As at the 31st December, 1983, your fleet in service numbered 84 vessels.
During the year, 5 obsolete ferries and 2
hoverferries were sold, 12 obsolete ferries were laid up pending disposal and 3 new ferries entered service comprising of: —
Triple Deck Passenger Ferry Double Deck Passenger Ferry HM2 Mark IV Hoverferry
Ferry Services
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In 1983 your Company was granted permission by the Government to terminate some loss making ferry services which had been either adversely affected by Mass Transit Railway operations or which had previously been heavily supported by subsidies from other ferry routes which have now also come under pressure.
Ferry services terminated were as follows:- Central District/Mei Foo Sun Chuen 1/1/1983 Central District/Poi Toi Central District/Chai Wan Ma Liu Shui/Wu Kai Sha
5/9/1983
26/9/1983
3/10/1983
Central District/Taikoo Shing
Hover ferry Service
4/10/1983
Weekday Central/Ma Wan/Sha Lo Wan/
Tung Chung/Tai (
1/12/1983
This pruning exercise as well as other economies achieved such as reduction of sailings in off peak hours have improved the return on net assets employed on ferry operations from what would have been a loss. position to a breakeven position for the year.
China Ferry Services
Three hoverferry services now operate to China from Tai Kok Tsui Ferry Pier in Kowloon, namely to Zhoutoujui in Guangzhou, to Whampoa and to Shekou. In November 1983, the hoverferry service to Zhoutoujui was renewed for a further period of three years.
Property
HYFCO Industrial Building Block III is expected to be completed in May 1984 and will be partly occupied by The Hong Kong Shipyard and the majority of the units will be available for rent.
Subsidiary Companies
Crestbridge Estates Ltd. owns Silvermine Beach Hotel at Mui Wo, Lantau Island which is operated by Silver Mine Enterprises Ltd. and commenced business in 1983. It is the only 78 room hotel with restaurant facilities
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