CTF Services (659) H1 2025 earnings summary

Executive summary

• Attributable Operating Profit (AOP) rose 4% year-over-year to HK$2,225.3 million, with operating businesses (excluding divested Free Duty) up 8% year-over-year.

• Profit attributable to shareholders increased 15% to HK$1,157.6 million for the six months ended 31 December 2024.

• Interim ordinary dividend of HK$0.30 per share and a special dividend of HK$0.30 per share declared, totaling HK$0.60 per share.

• Portfolio optimization continued with the disposal of Free Duty and Hyva Group, acquisition of CTF Life Insurance, and insurance settlements from Goshawk, strengthening liquidity and enabling future investments.

• Strategic focus on operational excellence, prudent financial management, and leveraging synergies within the CTF Group.

Financial highlights

• Revenue was HK$12,109.7 million, down from HK$13,978.5 million year-over-year, mainly due to divestitures and lower construction revenue.

• Adjusted EBITDA decreased 5% year-over-year to HK$3,556.8 million.

• Net debt increased to HK$16.1 billion, with net gearing ratio rising to 39% from 35% as of 30 June 2024.

• Average borrowing cost reduced to 4.2% (from 4.8%), with RMB debt now 63% of total debt, providing a natural hedge.

• Total available liquidity stood at HK$29.9 billion, with cash and bank balances of HK$18.6 billion.

Outlook and guidance

• Insurance and logistics segments expected to maintain robust growth, leveraging Chow Tai Fook Group synergies, agency expansion, and new product launches.

• Construction segment to benefit from government infrastructure initiatives, Northern Metropolis development, and the acquisition of Hsin Chong Aster.

• Facilities Management outlook positive with the opening of Kai Tak Sports Park and government support for exhibitions, despite economic headwinds.

• Roads segment faces uncertainties due to macroeconomic and policy factors; focus remains on operational agility and selective expansion.

• Group remains vigilant on macroeconomic uncertainties, interest rate risks, and RMB volatility, with proactive risk management and capital allocation.