Financial Review
Financial Resources, Treasury Activities And Gearing Ratio
The Group's capital expenditure and investments were funded from cash on hand, internal cash generation, loans, notes, bonds, share placement and other project loans.
As at 30th June, 2024, cash and bank deposits on hand amounted to HK$9,180 million and the total borrowings of the Group amounted to HK$23,400 million, which included Hong Kong dollar borrowings of HK$2,673 million and foreign currency borrowings of HK$20,727 million. Of the total borrowings, 35 per cent were repayable in 2024, 65 per cent were repayable between 2025 and 2028. The Group has secured loan facilities with certain banks for borrowings to be refinanced in 2024. The Group's financing activities continue to be well received and fully supported by its bankers.
The Group adopts conservative treasury policies in cash and financial management. To achieve better risk control and minimise the cost of funds, the Group's treasury activities are centralised. Cash is generally placed in short-term deposits mostly denominated in U.S. dollars, Hong Kong dollars, Australian dollars, New Zealand dollars, British pound, Canadian dollars or Renminbi. The Group's liquidity and financing requirements are reviewed regularly. The Group will continue to maintain a strong capital structure when considering financing for new investments or maturity of bank loans.
As at 30th June, 2024, the Group maintained a net debt position with a net debt to net total capital ratio of 9.8 per cent. This was based on HK$14,220 million of net debt and HK$145,574 million of net total capital, which represents the total borrowings plus total equity net of cash and bank deposits. This ratio was higher than that of 7.7 per cent at the year end of 2023. This change was mainly due to the fund utilised for the investment in a gas distribution network operator in Northern Ireland during the period.
The net debt to net total capital ratio would be 47.8 per cent by sharing of net debt in infrastructure investment portfolio on a look-through basis, which was based on HK$120,115 million of net debt and HK$251,469 million of net total capital. This ratio was slightly higher than that of 46.4 per cent at the year end of 2023.
To minimise currency risk exposure in respect of its investments in other countries, the Group generally hedges those investments with (i) currency swaps and (ii) the appropriate level of borrowings denominated in the local currencies. The Group also entered into certain interest rate swaps to mitigate interest rate risks. As at 30th June, 2024, the notional amounts of these derivative instruments amounted to HK$52,690 million.
Charge On Group Assets
As at 30th June, 2024, certain assets were pledged to secure bank borrowings totalling HK$1,580 million granted to the Group.
Contingent Liabilities
As at 30th June, 2024, the Group was subject to the following contingent liabilities:
| HK$ million | |
|---|---|
| Other guarantee given in respect of an affiliated company | 68 |
| Performance bond indemnities | 168 |
| Sub-contractor warranties | 24 |
| Total | 260 |
Employees
The Group, including its subsidiaries but excluding affiliated companies, employs a total of 2,408 employees. Employees' cost (excluding directors' emoluments) amounted to HK$521 million. The Group ensures that the pay levels of its employees are competitive and that its employees are rewarded on a performance related basis within the general framework of the Group's salary and bonus system.
Preferential subscription of 2,978,000 new shares of the Company was given to those employees who had subscribed for shares of HK$1.00 each in the Company at HK$12.65 per share on the flotation of the Company in 1996. The Group does not have any share option scheme for employees.
