Annual Report - QuamIR

Management Discussion and Analysis
Financial Review
During the twelve months under review, turnover for the year ended 31
December 2011 amounted to HK$695.5 million, an increase of 39.4% over
turnover of HK$499.1 million for 2010. Meanwhile, gross profit for the year of
HK$315.2 million also represented an increase of 107.6% over gross profit of
HK$151.8 million the previous year. The Group achieved an operating profit
of HK$380.0 million in 2011, compared with an operating loss of HK$282.3
million in 2010. Net profit attributable to equity holders of the Group
amounted to HK$241.3 million for the year under review, whereas net loss in
2010 was HK$293.8 million. Basic profit per share amounted to HK2.3 cents,
compared with basic loss per share in 2010 of HK2.8 cents.
695,500,000
499,100,000
39.4%315,200,000
151,800,000
107.6%
380,000,000
282,300,000
241,300,000
293,800,000
2.3
2.8
The significant increase in gross profit in 2011 and the turnaround in
operating results from a net operating loss in 2010 to a substantial operating
profit in 2011 was mainly attributable to the gains from the sale of units in
Nanxun International Building Materials City and the sale of its non core assets:
Jingguang Centre in Shenzhen, an office building in Shanghai, a commercial
project in Shenyang, and the entire interest in Peninsula Beijing Hotel. The
improvement in operating results was also due to the effective control in
operating expenses of the Group, despite the new expenses associated with
the development of additional property projects in 2011. The Group was also
sucessful in managing finance costs and finance income during the year,
contributing to the higher profit attributable to the equity shareholders for the
year.
Liquidity and Financial Resources
As at 31 December 2011, the Group’s total borrowings amounted to
HK$3,730.9 million, representing an increase of 1.3% when compared with
the equivalent figure of HK$3,682.4 million as at 31 December 2010. Total
borrowings as at 31 December 2011 included Hong Kong Dollar borrowings
of HK$253.4 million (2010: HK$56.6 million) and Renminbi borrowings
equivalent to HK$3,477.5 million (2010: HK$3,625.8 million).
3,730,900,000
3,682,400,000
1.3%
253,400,000
56,600,0003,477,500,000
3,625,800,000
The maturity dates for most of the Group’s outstanding borrowings are
spread over the next five years, with HK$740.0 million repayable within one
year or on demand, HK$1,257.2 million repayable within two to five years,
and HK$1,733.7 million repayable after five years.
740,000,000
1,257,200,000
1,733,700,000
All of the Group’s outstanding borrowings take the form of interest-bearing
loans, with interest rates at the market prices.
8 HKC (Holdings) Limited • Annual Report 2011