NWS has eye on acquisitions worth HK$4b

PUBLISHED : Wednesday, 06 October, 2010, 12:00am
UPDATED : Wednesday, 06 October, 2010, 12:00am

NWS Holdings, the Hong Kong-listed arm of New World Development, hopes to spend at least HK$4 billion to acquire at least two companies in the coming 12 months, NWS executive director Tsang Yam-pui said yesterday. 'Two major projects we are looking at, if successful, will cost up to HK$4 billion. We hope to do the acquisitions this fiscal year.'

One is a mainland toll road, which he said was a 'sizeable' project.

NWS was looking at several acquisitions, he said. 'There are a number of pipeline projects being explored and negotiated, including [the] toll road and two other projects.'

NWS had not yet decided how it would finance them, he said. 'But we have plenty of cash.' For the fiscal year ended June 30, strong operating cash flow combined with hefty proceeds from disposals landed it in a net cash position for the first time, with HK$300 million net cash.

NWS's net assets have almost tripled from HK$9.9 billion in 2004 to HK$26.5 billion this year.

In its China container railway business, NWS was aiming for annual throughput of 1.5 million 20-foot-equivalent units (TEU) this fiscal year, and 3.5 million TEU in 2013, Tsang said. It began operation in fiscal year 2008 with just one station at Kunming with a throughput of 70,000 TEU that year.

The share price of NWS rose 7.2 per cent to HK$16.72 - its highest level this year - yesterday after the company announced its results for the fiscal year ended June 30. Net profit soared 59 per cent to HK$4.01 billion while revenue tumbled 30 per cent to HK$12.09 billion, due to disposal of non-core businesses.

The firm netted a gain of HK$1.27 billion from disposal of its controlling interest in Taifook Securities Group and several securities investments. NWS's attributable operating profit rose 12 per cent to HK$2.84 billion. This is operating profit excluding non-recurring items, exceptional gains, head office expenses, finance costs and corporate interest income.S The growth was driven by a 37 per cent attributable operating profit growth in services business to HK$1.39 billion, but infrastructure business suffered a 4 per cent drop to HK$1.45 billion.

NWS will pay a dividend of 95 HK cents per share, 53 per cent more than last year, as well as one bonus share for every two shares.