1996 — Page 94

Analysis of Results and Financial Position

1,031.9

96

The Group's profit attributable to Shareholders for the financial year ended 31 December 1996 was HK$527.7 million (1995 - HK$461.1 million). The profit from franchised bus operations of the Company for the year, after the transfer of HK$1.8 million from the Development Fund (1995 transfer of HK$2 million to the Development Fund), amounted to HK$525.5 million (1995 - HK$461.1 million), representing an increase of 14 per cent over the previous year. Earnings per share for the year amounted to HK$1.31 (1995 HK$1.14).

Revenue and Operating Costs

In the year under review, revenue and operating costs related to franchised bus operations increased by 12 per cent and 12.6 per cent respectively as compared with the previous year.

The increase in revenue was mainly due to fare increases and a rise in the number of passengers carried during the year. The fare for cross harbour routes was increased by an average of 10 per cent from 3 March 1996 and that for other routes by an average of 2.7 per cent from 4 April 1996.

The increase in operating costs was mainly due to a rise in salaries, wages and other staff costs. A pay increase of 7.71 per cent was granted to all daily-rated employees with effect from 1 June 1996, and of 7.7 per cent to all monthly-rated employees with effect from 1 September 1996.

Passengers and Kilometres Travelled

In 1996, a total of 1,032 million passengers (1995 - 996 million) rode on KMB's buses, amounting to a daily average of 2.82 million passengers (1995 - 2.73 million). This represented an increase of 3.6 per cent in the number of passengers as compared with the previous year. The actual distance travelled by KMB's buses totalled 285 million kilometres (1995 - 271 million kilometres). The increase in patronage and distance travelled was primarily due to the introduction of additional routes as well as improved frequencies on certain routes.

Scheme of Control Statement

The Company's bus operating profit for the year fell short of the permitted return by HK$1.8 million. A Scheme of Control Statement relating to the Company's franchised bus operation for the year ended 31 December 1996 is presented on pages 63 to 67 of this report. The content of the Statement indicates the method of calculation of the permitted return under the Profit Control Scheme.

Total Number of

Passengers Carried (million)

1,200

1,000

996.0

970.7 965.8 976.7

900

750

600

450

300

150

0

222

92

93

94 95

21