CHAIRMAN'S STATEMENT
Results and dividends
The operating profit for the year ended 31 December 1989 was HK$122.2 million, representing an increase of 18.0% over the HK$103.6 million earned in 1988. After charging an exceptional item of HK$37.2 million arising from the additional provision for staff retirement funds, the profit before taxation was HK$85.0 million. Taxation absorbed HK$14.2 million (1988 - HK$14.6 million), leaving a consolidated net profit of HK$70.8 million for the year, a drop of 20.5% over 1988. Earnings per share was 38.7 cents.
In order to keep up with current practice and to further assure the benefits to employees on retirement, the company decided to transfer a sum of HK$37.2 million as additional provision for staff retirement funds.
The annual professional valuation of the group's investment properties was carried out at the end of 1989 by a senior executive of the company holding a recognised professional qualification. A buoyant Hong Kong property market coupled with the completion of the fourth block of industrial building in 1989 resulted in a net valuation surplus for the year of HK$135.3 million which has been credited to investment property revaluation reserve. Total shareholders' funds at year end amounted to HK$1,182.9 million and net asset value per share was HK$6.46.
The directors recommend a final dividend of 22 cents per share. This will give total dividends paid in respect of 1989 of 28 cents per share, an increase of 12% over the 25 cents per share paid for 1988.
Operational review
Ferry operations and related business
The phased opening of the Eastern Harbour Crossing in August and September 1989 inflicted substantial patronage losses in the group's ferry business. The patronage on the car ferry services and the 3 cross harbour passenger ferry services plying in the eastern side of the harbour dropped by more than 50%. The yearly patronage figures are summarised below:-
1989
Million
1988
Million
Change
Cross harbour car ferry services
5.0
5.5
-8.2%
Cross harbour passenger ferry services
43.7
49.0
-10.8%
Outlying districts passenger ferry services.
17.7
16.3
+8.4%
LO
5