CMB_1991 — Page 9

Chairman's Statement 1991

GROUP RESULTS AND DIVIDENDS

The Board of Directors announces that the audited consolidated profit for the year ended 30th June, 1991 after transfer of $4.86 million from the Development Fund in accordance with the Profit Control Scheme amounted to $72.97 million compared with $71.44 million for the previous year. The transfer of $4.86 million represents the whole of the balance of the Development Fund.

The Directors will recommend to shareholders at the forthcoming Ordinary Yearly Meeting to be held on 12th December, 1991 the payment of a final dividend of 33 cents per share. This, together with the first interim dividend of 21 cents per share, a special dividend of 5 cents per share and a second interim dividend of 18 cents per share already paid, will make a total dividend for the year of 77 cents per share, same as that for the previous year.

RESULT ON BUS OPERATIONS

Bus fares were increased on 31st March, 1991 to help offset a deteriorating financial performance which was partly attributable to the decline in patronage levels and to fuel price increases during the period of hostilities in the Persian Gulf. Despite this increase in fares, and the transfer of $4.86 million from the Development Fund' mentioned above, the result of bus operations fell short of the Permitted Return under the Public Bus Services Ordinance by $6.59 million.

TRAFFIC ACTIVITIES AND BUS FLEET

The number of passengers carried during the year under review decreased by 2.4% from 283.8 million to 276.9 million whilst kilometres operated increased by 3.8% from 50.4 million to 52.3 million.

Alterations to the bus route network and adjustments to service levels were implemented during the year so as to adapt the Company's operations to changes in travel patterns and passenger demand.

At the request of passengers, a new express Route 10X was introduced in August 1990 to provide a uni-directional service from Kennedy Town to Central in the morning peak period.

A new cross-harbour Route 690 was introduced in September 1990 via the eastern harbour tunnel to provide a link from the new town of Tseung Kwan O to Central.

Certain bus services in the Tin Wan area were re-arranged to cater for the removal of several thousand residents from Tin Wan Estate to the new Wah Kwai Estate. Under the re-arrangement scheme, Route 78 was withdrawn and replaced by two new circular Routes 78A and 78B operating between Wong Chuk Hang and Wah Kwai. In order to provide the new estate with direct services to Central and Causeway Bay, Route 79M was diverted via Wah Kwai and Route 72 was extended from Aberdeen to Wah Kwai.

Following the successful introduction of air-conditioned double-decker bus services on Routes 504 and 537 in Southern District in the summer of 1990, the opportunity was taken in June 1991 to introduce a new air-conditioned cross-harbour Route 301 operating uni-directionally from the KCR station at Hung Hom to Central in the morning peak period. This new route was an ingredient of the Government's "Operation Nathan" plan to divert commuters away from the Nathan Road section of the MTR in order to avoid overloading that section of the railway. Additional air-conditioned cross-harbour routes have subsequently been introduced under this plan, from Tsz Wan Shan, Ma On Shan, Mei Lam and Tai Po as Routes 302, 303, 305 and 307 respectively.

To enable a greater number of cross-harbour passengers to enjoy air-conditioned buses, these buses are deployed on Routes 105 and 111 after service in the morning peak period.

A demonstrator Dennis "Dart" air-conditioned single-decker coach was placed in service in April 1991 on Route 260 (Central -Stanley) to test its suitability for the narrow and tortuous roads on this route. Passenger reception was favourable and orders were subsequently placed for a further 19 similar coaches. Seven of these have been delivered and placed in service on Route 260.

In addition, a further twenty-nine new air-conditioned double-decker buses were purchased during the year for use on cross- harbour, Mid-Levels and Southern District routes. These double-deckers can carry 20% more passengers than the buses they have replaced.

After withdrawal of older, low capacity buses, the Company's fleet at 30th June, 1991 stood at 1,005 buses with a total carrying capacity of 121,871.

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