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SCMP Reporter

Beijing Enterprises Holdings reported a 41.5 per cent fall in attributable profit to $474 million for last year, the low end of market expectations.

 Stripping out exceptional items, the Hong Kong commercial arm of the Beijing municipal government saw profit rise 18 per cent to $503 million.

 Earnings were affected by an exceptional loss of $29 million from revaluation of properties in Beijing.

 This compared with a $385 million exceptional gain the previous year.

 Chairman Hu Zhaoguang said: '[This year] is expected to be a challenging year. A lot of effort has to be made to achieve the growth seen last year.'  He said the company's infrastructure division would be the main profit driver this year.

 Average toll fees for its 96 per cent-owned Capital Airport Expressway had surged about 48 per cent last year.

 The company expected to recieve a minimum after-tax income of 210 million yuan (about HK$195.3 million) a year from its 100 per cent-owned water-treatment plant it bought last year.

 Its brewery and telephone switching-systems businesses would extend their growth this year, he said.

 The tourism business would continue to face difficulties, while the retail division was budgeted to make a loss this year with a full turnaround expected in the second half of next year, Mr Hu said.

 The firm had planned for $600 million capital expenditure on new projects this year, with priority given to the infrastructure and technology sectors, he said.

 The expenditure would be funded from internal resources. The firm had cash of $3.6 billion and net cash of $851 million as of December.

 Earnings per share were down about 50 per cent to 76 cents but up 2.5 per cent to 81 cents if exceptional items were excluded.

 The firm proposed a final dividend of 15 cents a share, bringing the full-year total to 25 cents, up about 4 per cent.

 Last year's net operating profit was largely attributable to a 67 per cent surge in net operating profit at Yanjing Brewery to $246 million and a 129 per cent increase in the net profit in its 40 per cent-owned Beijing International Switching System to $521 million.

 It was also helped by a 64 per cent jump in interest income on cash holding and a small proportion of rental income to about $115 million.

 Beijing Enterprises' tourism business in the Great Wall area posted a net loss of $4 million last year, against a net profit of $22.7 million a year earlier.

 Its Jian Guo Hotel joint venture showed a 42 per cent fall in net profit to $25 million as the Asian financial crisis hit the mainland tourism industry.

 Beijing Wangfujing Department Store (Group) posted a net loss of $63 million against net profit of $90 million previously.



Profits at Beijing Enterprises slide 41pc