Interim Dividend
The Directors have today declared an interim dividend of 21 cents per ordinary share. This is a 11% increase over 1987, however, in absolute payout terms, it represents an increase of 28%, after taking into account extra Rights Issue and warrant conversion shares. The dividend will be payable on the 12th of October, 1988 to those members registered as ordinary shareholders on the 7th of October, 1988.
To qualify for the interim dividend, transfers should be lodged with the Registrars by 4.00 p.m. on Friday, the 23rd of September, 1988. The Register of Members will be closed from 27th of September, 1988 to the 7th of October, 1988, both days inclusive.
Operations
The Hongkong Electric Co. Ltd. started 1988 with a very strong increase in units sales and whilst a 10% increase had been recorded by mid-year, there are indications that this level may not be sustainable for the full year. Maximum demand for the half year reached a new record of 1407MW compared to 1342MW during the same period of 1987.
Lamma Unit 5, our second 350MW coal-fired unit was successfully commissioned in March, and in April our Company placed an order for a third 350MW coal-fired unit, which is scheduled to be commissioned in 1992.
Manufacturing has commenced for the new gas turbines ordered earlier in the year, and work has started on the decommissioning of two of the Apleichau generators for their eventual removal to Lamma, where they will be connected to the new gas turbines for operation next year.
Both Kennedy Road Zone Substation and Chunghomkok Zone Substation had been commissioned, and satisfactory progress continues to be made in further automating distribution control systems.
Associated Technical Services Ltd. continues to perform well, and is currently assisting in the commissioning of the new Dalian and Fuzhou Power Stations, and in installing gas turbines for the Auraiya Power Station.
Prospects
With The Hongkong Electric Co. Ltd. fully involved with installation planning for its new gas turbines and its third 350MY coal-fired unit, and with Associated Technical Services Ltd. continuing to perform well on its existing contracts, the Group should have another successful year. Subject to unforeseen circumstances, the Group's full year profits should exceed those of last year and the final dividend should not be less than that paid in respect of 1987.
Finally, I would like to thank the Board of Directors and the employees of the Group for their continued loyalty, support and hard work.
Simon Murray Chairman
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