Road King Infrastructure (1098) H1 2024 earnings summary

Executive summary

• Net loss attributable to shareholders was HK$1,027 million for H1 2024, with loss per share of HK$1.37, amid a challenging property market and reduced toll road contributions.

• Group revenue fell 45% year-over-year to HK$3,468 million, mainly due to a 53% drop in property sales and a 29% decline in toll revenue.

• Completed disposal of all Mainland China toll road assets in April 2024, resulting in a one-off net gain after tax of HK$1,490 million, positively impacting profit and cash flow.

• Bank balances and cash increased to HK$6,716 million as of 30 June 2024.

• No interim dividend declared for H1 2024.

Financial highlights

• Property sales (including JV/associates) for H1 2024 were RMB7,304 million, down 53% year-over-year.

• Toll revenue was HK$1,594 million, down 29% year-over-year, mainly due to asset disposals.

• Gross loss for the period was HK$364 million, with a gross loss margin of 10%.

• Total assets declined to HK$64,806 million from HK$73,146 million at end-2023.

• Equity attributable to owners was HK$14,234 million; net assets per share at HK$19.00.

Outlook and guidance

• Real estate market in Mainland China expected to remain sluggish in H2 2024, with further policy support anticipated but recovery will take time.

• Group will remain prudent in land acquisition, focus on cash flow management and property delivery.

• Toll road segment to focus on optimizing Indonesian operations and expects first dividend income from Indonesian JVs in 2024.

• Debt management measures, including maturity extensions, provide breathing room for business recovery.