ck infrastructure holdings limited annual results 2019 · 3/18/2020 · ck infrastructure holdings...

CK Infrastructure Holdings Limited

Annual Results 2019

18 March 2020



2019 Results Overview

1

Profit contribution from: (HK$ million) 2019 2018 2019 vs 2018

Investment in Power Assets

Gain on disposal of 2.05% interest in Power Assets

2,564

427

2,903

-

-12%

N/A

United Kingdom portfolio 4,630 5,275 -12%

Australia portfolio 2,083 2,066 +1%

Continental Europe portfolio 785 870 -10%

Canada portfolio 335 335 -

New Zealand portfolio 174 172 +1%

Hong Kong and Mainland China portfolio 371 389 -5%

Total Profit Contribution 11,369 12,010 -5%

Profit Attributable to Shareholders 10,506 10,443 +1%

EPS (HK$/share) 4.17 4.14 +1%

Interim DPS (HK$/share) 0.680 0.680 -%

Final DPS (HK$/share) 1.780 1.750 +1.7%

Full year DPS (HK$/share) 2.460 2.430 +1.2%


Sustainable Dividend Growth (23rd Consecutive Year)

2

0.100 0.120 0.130 0.200 0.210 0.215 0.215 0.220 0.240 0.250 0.270 0.297 0.321 0.330 0.365 0.400 0.500 0.525

0.600 0.630 0.670 0.680 0.680

0.160

0.220 0.260 0.290

0.400 0.420 0.465 0.500 0.570

0.708 0.750 0.830 0.838

0.880 1.000

1.165 1.260

1.360 1.475

1.550 1.630

1.710 1.750 1.780

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Interim Dividend Final Dividend

Dividends per Share (HK$)


Global Portfolio

3

United Kingdom

40% UK Power Networks

40%* (12%)

Northumbrian Water

47.1% Northern Gas Networks

30%* (9%)

Wales & West Gas Networks

50%* (15%)

UK Rails

25% Seabank Power

4.8% Southern Water

Australia

23.1% SA Power Networks

23.1% Victoria Power Networks

26.4% United Energy

45.0%* (8.25%)

Australian Gas Networks

40% Multinet Gas

40% Dampier to Bunbury Pipeline

40% Energy Developments

50% Australian Energy Operations Continental Europe

35%* (10.5%)

Dutch Enviro Energy

50% Portugal Renewable Energy

35% ista

As of 18 March, 2020

New Zealand

100% EnviroNZ

50% Wellington Electricity

Canada

50% Canadian Power

50%* (15%)

Park’N Fly

16.3% Canadian Midstream Assets

25% Reliance Home Comfort

Investment in PAH

36.0% Power Assets (6-HK)

Mainland China / HK

33.5% Shen-Shan Highway (Eastern Section)

30% Shantou Bay Bridge

50% Jiangmen Chaolian Bridge

40% Panyu Beidou Bridge

50% Alliance Construction Materials

100% Green Island Cement

100% Anderson Asphalt

100% Green Island Cement (Yunfu)

67% Guangdong Gitic Green Island Cement

Note: * The percentages in ( ) represent the economic benefits acquired from CKHH by CKI


Analysis on Profit Attributable to Shareholders

4

(in HK$ million) 2019 2018 2019 vs 18

Investment in Power Assets

Gain on disposal of 2.05% interest in Power Assets

2,564

427

2,903

-

-12%

N/A

United Kingdom portfolio 4,630 5,275 -12%

Australia portfolio 2,083 2,066 +1%

Continental Europe portfolio 785 870 -10%

Canada portfolio 335 335 -%

New Zealand portfolio 174 172 +1%

HK & Mainland China portfolio 371 389 -5%

Total Contribution from Businesses 11,369 12,010 -5%

Treasury Related Activities & Others (67) (771) +91%

Distribution to Perpetual Securities (796) (796) -%

Profit Attributable to Shareholders 10,506 10,443 +1%

Negatively impacted by GBP/HKD

Exceptional items (HK$ million) 2019 2018 Non-cash revenue recognition - 783

Decline due to 1) lower contribution from PAH as CKI’s interests reduced to 35.96% in Jan 2019, 2) lower contribution from UK Power Networks, 3) negative impact from FX and 4) lower contribution from HKEI as new SOC started in Jan 2019

Decline due to 1) lower EUR/HKD and 2) one-off deferred tax credit for ista in certain countries in 2018

Weak traffic revenue from toll road businesses in China

Driven by lower interest expenses and full year contribution from the economic benefits acquired from CKHH


International Businesses – Currency Impact

Profit contribution in HK$ (million)

2019 vs 2018

2019 2018 in HK$ in local currency

UK 4,630 5,275 12% 8%*

Australia 2,083 2,066 1% 7%

Continental Europe 785 870 10% 4%

Canada 335 335 -% 2%

New Zealand 174 172 1% 7%

5

Note: * Profit contribution from the UK in local currency term exclude the impact caused by ceasing to recognize certain non-cash revenue commencing 2019 by UK Power Networks


Profit Contribution by Regions

6

2019 2018

UK

44% PAH

24%

Australia

17%

HK & China

3%

New

Zealand

2%

Continental

Europe

7% Canada

3%

HK & China 5%

Australia 5%

Others 1%

UK 13%

UK

41% PAH

26%

Australia

18%

HK & China

3%

New Zealand

2%

Continental

Europe

7%

Canada

3%

HK & China 7%

Australia 5%

Others 3%

UK 11%


Solid Financial Position

7

Dec 31, 2019 Dec 31, 2018

Cash on hand (HK$ million) 12,077 6,090

Debts (HK$ million) 31,742 30,139

Total equity (HK$ million) 126,374 121,904

Net debt to net total capital ratio 13.5% 16.5%

S&P credit rating A/Stable A/Stable


CKI Gearing Ratio (Since 2000)

8

Net Debt / Net Total Capital

26.7%

15.1%

17.0%

15.0%

12.4%

2.7%

4.3%

Net cash

3.3%

Net cash

5.4%

12.5%

5.3%

8.1%

10.2%

7.7%

4.5%

17.6% 16.5%

13.5%

0%

5%

10%

15%

20%

25%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Regulatory Resets Timetable

» Regardless of the regulatory environment, CKI’s regulated businesses target to be efficient operators under their respective regimes

9

2019 2020 2021 2022 2023

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

UK Power Networks

Northumbrian Water Group

Northern Gas Networks

Wales and West Utilities

SA Power Networks

Victoria Power Networks

Australian Gas Networks - SA/ QLD

Australian Gas Networks - Vic/ NSW

Dampier to Bunbury Pipeline

United Energy

Multinet Gas

Wellington Electricity

Current price control period


Significant Reductions in Allowed Returns

» Operating outperformance is unlikely to fully offset these

reductions

10

Northumbrian Water UK (real returns)

SA Power Networks (Australia) (nominal returns)

* Source: Ofwat Final Determination (Dec 19)

** Source: Australia Energy Regulator (AER) Draft Decision (Oct 19)


Some Examples of Our Environmental Initiatives

» CKI is a global infrastructure player with significant investment in energy infrastructure

» We recognize the significance of climate change; impacts to the environment are embedded into our decision makings, from strategic planning at the group level to the day-to-day operations for our business units

» CKI’s businesses are pursuing decarbonisation through various means:

• Our gas companies in the UK (Wales and West Utilities, Northern Gas) are pursuing innovative approaches to investigate the feasibility of converting the existing gas network to incorporate hydrogen supported by regulatory funding

• Australian Gas Networks is developing Hydrogen Park SA, a hydrogen production facility under construction, which will blend hydrogen produced into the local gas distribution network in parts of South Australia, which is fully supported by the South Australian Government

• UK Power Networks is building energy infrastructure to support electric vehicle (EV) charging and smart meter projects; currently there are nearly 70,000 EVs in its area of operation and this is estimated to reach 4 million EVs by 2030. By the end of 2019, UKPN had over 6GW of renewable energies connected to its networks

11


Disclaimer

12

Potential investors and shareholders of the Companies (the “Potential

Investors and Shareholders”) are reminded that the Presentation comprises

extracts of recent operational data and financial information of the Group

which have not been reviewed or audited by the Companies’ auditors.

Potential Investors and Shareholders should exercise caution when investing

in or dealing in the securities of the Companies.


Thank You

ck infrastructure holdings limited annual results 2019 · 3/18/2020 · ck infrastructure holdings...

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