CMB_1994 — Page 9

Chairman's Statement

GROUP RESULTS AND DIVIDENDS

The Board of Directors announces that the audited consolidated profit for the year ended 30th June, 1994 amounted to HK$258.08 million, which included an exceptional gain of HK$177.37 million in relation to the disposal of Inland Lot 7550, King's Road, North Point, compared with HK$82.16 million for the previous year.

The Directors will recommend to shareholders at the forthcoming Ordinary Yearly Meeting to be held on 9th December, 1994 the payment of a final dividend of HK$0.74 per share. This, together with the first interim dividend of HK$0.21 per share, a special dividend of HK$0.30 per share and a second interim dividend of HK$0.50 per share already paid, will make a total dividend for the year of HK$1.75 per share, compared with HK$1.91 per share for the previous year.

RESULT OF BUS OPERATIONS

Bus fares on cross-harbour services were increased on 1st April, 1994, and this helped offset the increase in costs due to inflationary pressures. Despite this increase, the fare revenue from bus operations for the year ended 30th June, 1994 fell by HK$54.06 million compared with the previous year. Subsequently, bus fares on Hong Kong Island services were increased on 3rd July, 1994.

TRAFFIC ACTIVITIES AND BUS FLEET

The number of passengers carried during the year under review decreased by 19.5% from 258.7 million to 208.2 million. The main cause for this reduction was the withdrawal of 26 routes from the Company's network, when the Company's previous franchise ended on 31st August, 1993. The kilometres operated amounted to 45.0 million compared with 51.3 million in the previous year. Again, this reduction was principally caused by the withdrawal of routes.

Following the withdrawal of routes we were able to return to a full establishment of staff. However, the general shortage of labour continues to hamper the Company in the recruitment of drivers to replace those leaving the Company's service. Serious traffic congestion continues to affect the reliability of our services and consequently reduces the number of kilometres operated.

This financial year has seen the introduction of twelve new bus routes and a number of other service improvements. Of the new routes, Route 788 (Siu Sai Wan Central), an express service to link Siu Sai Wan with Wan Chai and Central, was introduced to cater for the increasing development at Siu Sai Wan and to counteract the effects of traffic congestion. To cater for the new developments at Ma Hang and Yiu Tung Estate, Route 66 (Ma Hang - Central), Route 2A (Yiu Tung to Wan Chai Ferry) and Route 2M (Yiu Tung - Shau Kei Wan) have commenced, with additional services planned upon further population intakes. To cater for alterations in demand three new routes serving Southern District were introduced in the Autumn of 1993. To improve efficiency, with the agreement of Government, the operation of six routes serving the northern shore ceased.

In order to meet the rising demand for high quality bus services, twenty new air-conditioned buses entered operation during the period. These buses have been used to enhance South Horizons, Mid-Levels and Cross-Harbour services. Additionally, ten new large capacity buses were deployed to increase the capacity of services in Eastern District. After the withdrawal of 31 older low capacity buses, the Company's fleet at the year end stood at 1,002 buses with a total carrying capacity of 119,187. Of these, 103 are air-conditioned buses. A further 38 air-conditioned buses are soon to enter service. After a further withdrawal of older vehicles, air-conditioned buses will represent 15% of the total fleet.

FACILITIES FOR PASSENGERS

The Company is continuing to construct bus shelters throughout Hong Kong Island. A new list of proposed locations for bus shelters is being agreed with Transport Department and these will be constructed as part of a rolling programme.

FACILITIES FOR DISABLED PASSENGERS

To facilitate the use of our services by the disabled, all new buses which have entered service since 1993 have incorporated some of the features recommended by the UK's Disabled Persons Transport Advisory Committee (DIPTAC).

SENIOR CITIZEN CONCESSIONARY FARE SCHEME

On July 3rd 1994, the Company extended the Senior Citizen Concessionary Fare Scheme, which had been introduced on June 6th 1993, to cover all Hong Kong Island Routes for all day on weekdays, Sundays and Public Holidays.